- AdvaMed CEO Scott Whitaker again urged President Donald Trump to press for the repeal of the medical device excise tax, an element of the Affordable Care Act the lobby has successfully beaten back for years.
- In a letter sent Thursday, Whitaker said the return of the tax at the start of next year would have a “devastating” effect on the medical device industry.
- The tax, which has been suspended since the start of 2016, requires companies to pay 2.3% on sales of medical devices.
Whitaker’s letter to Trump is the latest part of a long-running campaign against the medical device tax. The tax was enforced in 2013, 2014 and 2015 but legislators passed a two-year moratorium that freed companies from the requirement to pay it in 2016 and 2017. Subsequent legislation extended the moratorium out to the end of 2019.
With that deadline looming, lobbyists are stepping up efforts to protect the industry from the tax. Last month, Whitaker told reporters the plan was to attach an amendment repealing or — more likely — delaying the tax to include in whatever must-pass legislative package Congress tackles late this year.
The letter to Trump is part of the push to repeal the tax. In the letter, Whitaker argues that “a suspended tax is little more than a looming tax,” and that companies must act as if the tax will come into force, affecting their ability to make multi-year investments in R&D and hiring.
Whitaker points to Department of Commerce data showing the loss of 29,000 medtech jobs between 2013 and 2015 to make his case that the excise tax is bad for businesses and workers.
But the Congressional Research Service, among others, have cast doubt on the strength of the link between the tax and loss of jobs, suggesting the impact is negligible. That same report found the impact would be higher prices passed along to consumers, rather than a hit to medical device company profits.
Either way, the industry has been successful in lobbying members on both sides of the aisle, including nontraditional allies in blue states like Massachusetts, where many device companies reside.
Whitaker’s newest letter hit many of the same points in a similar letter he sent to Trump late in 2017, shortly before the previous moratorium on the medical device tax was due to end.