The Advanced Medical Technology Association (AdvaMed) sent letters July 18 to House and Senate leaders urging “timely action” on legislation to repeal the 2.3% excise tax on the sale of most FDA-regulated devices, slated to begin on Jan. 1, 2013.
The tax is mandated under the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (H.R. 3590), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152 (H.R. 4872). In its letters to congressional leaders, including Senate Majority Leader Harry Reid, D-Nev., and House Speaker John Boehner, R-Ohio, AdvaMed said the tax would result in lost jobs and would hamper innovation.
“Despite the 2013 implementation date, the tax is already having an adverse impact on [research and development] investment and job creation, jeopardizing the U.S. global leadership position in medical device innovation,” the letters state. “If this tax is not repealed, it will continue to force affected companies to consider cutting manufacturing operations, [R&D], and employment levels to recoup the lost earnings due to the tax. It will also adversely impact patient access to new and innovative medical technologies.”
A spokesperson for AdvaMed said the letters were sent to reinforce its support for existing legislation and for new legislation to repeal the tax. The letter was signed by 428 medical device companies and other industry stakeholders.
“The medical device excise tax is a serious burden for companies struggling to maintain America's global leadership in the development of medical technology,” says Stephen J. Ubl, president and chief executive officer of AdvaMed. “We support its repeal. If this tax is implemented in 2013, it will undermine our industry’s ability to create and maintain good jobs in the U.S., and worse, will lead to higher costs for patients, undercutting one of the primary goals of health care reform.”
On June 6 AdvaMed released its Competitiveness Agenda, a plan that outlines six major proposed policy imperatives for the Obama administration to improve the ability of U.S.-based device companies to maintain their position as global leaders in the medical technology field.