WASHINGTON — On Tuesday, companion bills were introduced in the House and Senate to repeal the medical device tax included in the Patient Protection and Affordable Care Act.
Rep. Erik Paulsen, R-Minn., who proposed a similar measure last year, introduced the Protect Medical Innovation Act in the House, while Sen. Orrin Hatch, R-Utah, introduced the Senate bill. The legislation would repeal the 2.3 percent excise tax on medical device sales included in PPACA as a way to help pay for health reform.
Set to begin in 2013, the tax is estimated to raise $20 billion over 10 years. HME leaders have said the tax would send more of the industry's manufacturing jobs offshore and curtail research and development.
According to a statement from Paulsen, who co-chairs the House Medical Technology Caucus, "Taxing the medical technology industry to the tune of $20 billion will only stifle growth, innovation, and access to the life-saving technologies U.S. device companies produce." Hatch, ranking member of the Senate Finance Committee, echoed the sentiments in a statement, saying the tax would "cripple an important engine of opportunity, job growth and innovation, while hurting the advancement of technologies essential to improving patient care."
The Medical Device Manufacturers Association applauded the legislation in a statement of its own.
"The United States is the global leader in medical technology and innovation, and the repeal of such an onerous tax will help us maintain our position," said Mark Leahey, MDMA president and CEO. "It is crucial that we support entrepreneurs and engineers who continue to create quality jobs and physicians who focus on improving the quality of life for patients, especially in an increasingly competitive global marketplace.
"When our nation's job-creators face a future with additional taxes and an unpredictable regulatory environment, growth and innovation are stifled. Instead, we need policies that provide incentives for hiring employees and investments in research and innovation."
The MDMA also said the tax would "disproportionately harm small businesses that develop the majority of innovative and cutting-edge technologies."
