Utah’s Congressional Representatives Support Repeal of Tax on the Medical Device Industry

April 16, 2019

SALT LAKE CITY—Kelvyn Cullimore, President and CEO of BioUtah, issued the following statement on introduction in the House of Representatives of the “Protect Medical Innovation Act of 2019,” H.R. 2207, introduced by Reps. Ron Kind (D-Wis.) and Jackie Walorski (R-Ind.), to permanently repeal the medical device tax.

“BioUtah applauds the bipartisan introduction in the House of the ‘Protect Medical Innovation Act’ to fully repeal the 2.3% excise tax on medical device sales. We appreciate the strong support of Utah’s congressional delegation. Reps. Rob Bishop (R-UT), Chris Stewart (R-UT), John Curtis. (R-UT), and Ben McAdams (D-UT) were all original sponsors of the bill. Sen. Mitt Romney (R-UT) has co-sponsored identical legislation in the Senate.

Unless Congress acts, the tax will again take effect January 1, 2020. This tax is unique in that it taxes sales and not profit. Therefore, smaller companies who have not yet achieved profitability or those who are marginally profitable are significantly harmed by this legislation. Research and development at larger companies is frequently victimized by this egregious tax. Now is the time to end this tax and provide companies the long-term certainty needed to propel new life-changing medical technology.

Utah boasts numerous medical device companies well-established in the state. Medical device development and manufacturing is an important part of the Utah economy, spurring innovation, creating jobs and importantly, advancing patient care. BioUtah looks forward to working with Congress to pass this critical legislation.”

Both Scott Whitaker, president and CEO of the Advanced Medical Technology Association (AdvaMed), and Paul LaViolette, chairman of the board of directors for the Medical Device Manufacturers Association (MDMA), issued statements on the bill.

“America’s medical technology industry is facing a $20 billion tax increase at year-end, when the current medical device tax suspension expires. Urgent action is essential to protect future medtech innovations that benefit patients and to avoid putting good-paying U.S. jobs at risk,” said Whitaker. “House introduction today of the ‘Protect Medical Innovation Act of 2019’ in the 116th Congress brings us one step closer to ensuring this innovation-stifling burden on the medtech industry never returns, supporting continued American leadership of this vital industry.”

“The harm this policy caused when it was in place is well known, and we cannot allow the device tax to divert one more dollar away from research and development into the cures and therapies of tomorrow or to destroy one more job,” said LaViolette.

Complete AdvaMed Statement
Complete MDMA Statement

Background:

• The medical device tax was enacted as part of the Affordable Care Act in 2010.
• The medical device tax was in effect from 2013-2015.
• The Consolidated Appropriation Act of 2016 suspended the tax for 2016/2017.
• The Making Further Appropriations for the Fiscal Year ending September 30, 2018 extended the suspension for another two years, 2018/2019.

About BioUtah

BioUtah is an independent 501(c)(6) trade association serving Utah’s life sciences industry. Its members are diverse, with strengths in medical device manufacturing and services, biotechnology, pharmaceuticals, diagnostics and healthcare IT, and are a key driver of Utah’s economy. Together, we create an ecosystem that fosters collaboration, promotes innovation, and advances healthcare. BioUtah is committed to growing Utah into a global leader in the life sciences.