U.S. House, Senate Funding Bill Includes Device Tax Suspension

Devicemakers may get a reprieve as part of a bill passed by the U.S. House and Senate on Friday that included a provision to suspend the 2.3 percent medical device excise tax for 2016 and 2017. President Barack Obama signed the year-end omnibus appropriations bill late Friday.

Obama had promised to veto legislation that would repeal the tax. However, during a Wednesday press briefing, White House Press Secretary Josh Earnest said that although the temporary suspension of the tax is not supported by the administration, “we’re willing to go along with it because of the important measures that are included in this legislation.”

Industry has been pushing for an outright repeal of the medical device tax. Although the suspension would be a compromise, it also represents an important positive for the industry, says Lawrence Biegelsen, a senior analyst with Wells Fargo Securities.

“A two-year delay lays the groundwork for future delays or an outright repeal in our view,” he says.

AdvaMed, the Medical Imaging & Technology Alliance and the Medical Device Manufacturers Association applauded passage of the legislation.

The tax has been a drain on the economy and has halted investment in research and development for advanced imaging and other life-saving technologies, says MITA Board Chairman Nelson Mendes, president and CEO of Ziehm Imaging.

Earlier this month, the Senate voted 52 to 47 in favor of H.R. 3762, also known as the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015, which contains a provision to repeal the device tax. That vote followed an Oct. 23 House vote of 240 to 189 to pass the measure. (IDDM, Dec. 4).

Read the text on the device tax moratorium here, under Section 174: www.fdanews.com/12-15-HouseBill.pdf. — Jonathon Shacat