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Medical Device Tax to be Permanently Repealed This Week

December 17, 2019 in Life Sciences News by Denise Bell

Yesterday, top congressional leaders and the White House unveiled a $1.4 trillion FY 2020 government spending agreement that will fully repeal the 2.3% medical device tax, first enacted as part the Affordable Care Act in 2010.

“This is a big win for Utah’s medical device industry and most importantly, a big win for patients whose lives depend on the innovative and transformative work of this critical sector,” said Kelvyn Cullimore, president and CEO of BioUtah.

The House of Representatives is slated to vote on the spending measure today, setting up a Senate vote before the end of the week and averting a government shutdown. Current government funding expires December 20. President Trump is expected to sign the legislation.

BioUtah appreciates the unwavering support and leadership of our Utah Representatives, Rob Bishop, Chris Stewart, John Curtis and Ben McAdams in doggedly pushing for repeal. We also thank Senator Mitt Romney for standing strong and urging an end to the tax.

Inclusion of the repeal provision not only prevents implementation of the tax on January 1, 2020, but once and for all, provides much needed certainty to device manufacturers that must plan for the long-term and determine how much to invest in research and development, capital improvements and expansion. For nearly a decade, the industry has operated under unpredictable, short-term suspensions of the tax.

Yesterday, in a communication about repeal to state affiliates, including BioUtah, Scott Whitaker, president and CEO of AdvaMed, noted that “this is remarkable and exciting news after years of effort…this has indeed been a long fight—but one that is so critical to ensuring the patients we serve continue to have access to innovative medical technologies…” We couldn’t agree more.

Earlier this year, Utah medical device companies joined a broad coalition of medical innovators, physician inventors, patient groups, and others to send a letter to congressional leadership urging them to permanently repeal the medical device excise tax. The letter, with over 600 signatories (including approximately 30 Utah companies), was organized by BioUtah partners—the Medical Device Manufacturers Association (MDMA), the Advanced Medical Technology Association (AdvaMed), and the Medical Imaging & Technology Alliance (MITA).

In addition to the medical device tax, the spending package will eliminate a tax on high-cost “Cadillac” health insurance plans as well as a tax on health insurers. 

The spending package, which will move in two separate pieces, reflects all 12 FY 2020 appropriations bills addressing every federal agency.

Look for additional alerts from BioUtah as lawmakers vote and send the final package to the President’s desk.