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House votes to repeal medical device tax

by John R. Fischer, Senior Reporter | July 25, 2018
Medical Devices

Hope previously told HCB News in January that job losses had ticked up to nearly 29,000 as a result of the medical device tax with another 25,000 predicted to be lost by 2021, according to findings of a study conducted by the American Action Forum.

Supporters, though, have called these figures overstated, backing up their arguments with evidence such as a 2015 Government Accountability Office report which found sales under the tax to be rising rather than declining. Such a trend they said could be due to coverage expansion under the ACA, boosting potential markets for their products, and that repeal will prevent the accumulation of necessary funding for healthcare costs.

Repeal of the tax has the backing of the Trump administration, a staunch opponent of the ACA, as evidenced in a letter obtained by the Washington Examiner in which the administration refers to the fee as a danger to U.S. jobs and patient care, and a threat to the country’s status as a leading player in the global healthcare arena.

"Repealing this tax would lower healthcare costs, save American jobs and promote a patient-centered healthcare system," the letter reportedly reads. "This tax is an obstacle for patients seeking access to medical advances, and threatens to undermine the position of the United States as the global leader in healthcare investment and innovation."

A total of 57 Democrats joined 226 Republicans to vote in favor of the Protect Medical Innovation Act, also referred to as H.R. 184. It will next head to the Senate to be voted on and if passed, will then be sent to President Donald J. Trump to be signed into law.

Patrick Riley, transformational health principal consultant and analyst for the marketing research consulting firm Frost & Sullivan, told HCB News that bipartisan support for repeal will almost undoubtedly guarantee passage of the legislation on the Senate floor when it resumes following its recess.

"From an industry perspective, it’s a bad idea. We don’t need an excise tax on medical devices, manufactured or imported within the United States," he said. "There’s no need for it. There are a couple of studies done that showed we would lose jobs as a result of it. Not only that but it would be a deterrent to entrepreneurs in the industry and that’s critical to medical devices or start-ups that have new ideas for patient monitors and other important devices."

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