In December of 2015, President Barack Obama signed legislation that among other thing suspended the medical device excise tax for two years. The device tax was originally enacted as part of the Affordable Care Act of 2010 and was a significant impediment to innovation and job creation for medical technology companies. These American companies were forced to cut their investments in research and development and some even reduced their workforces to pay the tax. Patient access to critical new technology was threatened.
With the suspension, medical technology companies are working to improve investment in R&D, restore employee benefits, and re-start delayed projects. The two-year suspension is having a real-world effect on the future of innovation and patient care. We greatly appreciate the work of our allies in the patient community, other stakeholders, and Members of Congress to secure the suspension of the tax, and we look forward to working with all of these key partners to ensure that the benefits of the suspension continue for the long term.
The U.S. leads the world in the development of new medical technology. Medical technology creates more than two million jobs directly and indirectly all over the United States. The industry is one of the few U.S. manufacturing sectors that is a net exporter. Someone you know is counting on R&D to bring the next breakthrough in medical progress to life. With an aging population, people with disabilities living longer lives, and chronic disease rates growing at faster rates, now is the time for more—not less—resources to advance cures and treatments that help people live longer and healthier lives.
Research advocates, disability rights leaders, patient groups and many others support permanent repeal of the device tax because it drains critical resources away from medical innovation. While this temporary suspension is a good first step, it is not a solution. A permanent repeal will allow medical technology companies to confidently reinvest in their operations, R&D, and workforces to continue creating the life-changing technologies that improve and save people’s lives.