New Congress Takes Another Run at Repealing the Medical Device Tax

January 13, 2015—The Medical Device Access and Innovation Protection Act, S. 149, a bill to repeal the medical device tax that was implemented as a part of the Patient Protection and Affordable Care Act (PPACA), was introduced in the U.S. Senate. Under PPACA, manufacturers of medical devices are required to pay a 2.3% excise tax on medical devices. 

The bipartisan group of Senators introducing the bill was led by Senators Orrin Hatch (R-UT), Chairman of the Senate Finance Committee, and included Senators Amy Klobuchar (D-MN), Pat Toomey (R-PA), Joe Donnelly (D-IN), Richard Burr (R-NC), Al Franken (D-MN), Rob Portman (R-OH), Bob Casey (D-PA), Dan Coats (R-IN), and Jeanne Shaheen (D-NH).

The bill was first introduced in the Senate in 2013, followed by Senate passage (79/20) of an amendment to the nonbinding Fiscal Year 2014 Budget Resolution to repeal the medical device tax. However, the legislation did not advance.

In the U.S. House of Representatives, Congressman Erik Paulsen (MN-03) announced, on January 6, the introduction of legislation—the Protect Medical Innovation Act—that would repeal the medical device tax. The 114th Congress convened on January 3. Congressman Paulsen serves on the House Ways and Means Committee, the bicameral Joint Economic Committee, and is co-chair of the Congressional Medical Technology Caucus.

According to Congressman Paulsen’s announcement, the Protect Medical Innovation Act has broad bipartisan support with 254 cosponsors, including 27 Democrats. The legislation repeals the 2.3% excise tax implemented under the PPACA. Mr. Paulsen introduced similar legislation in the 113th Congress, which passed the U.S. House of Representatives on two different occasions but was not brought up for a vote in the U.S. Senate.

Mr. Paulsen stated in the press release, “The medical device tax continues to stifle innovation, cost American jobs, and drive up health care costs despite bipartisan opposition in both houses of Congress. With over 250 cosponsors on day one of the new session, it’s clear repealing this tax should be one of the priorities for the new Congress. The American people are looking for their elected officials in Washington to find common ground and repealing the medical device tax is a great place to start.”  

The press release noted that in November, Congressman Paulsen wrote an opinion article in the Wall Street Journal explaining why repealing the medical device tax should be one of the first steps the 114th Congress should take.