Ever since Donald Trump was elected as president of the US last November, the medical device sector hoped a controversial tax on devices would be removed completely. Now, nine months into Trump’s presidency, manufacturers are calling onto medical leaders to speed up this process.
A new report by the Investor’s Business Daily details how leaders in the industry complained about the progress for the repeal of this 2.3 percent tax, which was suspended in 2016 but is set to be reactivated in 2018. Paul LaViolette, chief operational officer at SV Health Investors–a venture capital firm where he leads the medical device investments–said when the tax went into a pause, the industry didn’t expect to still haven’t solved it, 21 to 22 months later.
“We can easily get harmed by the unplanned, unwitting change and it’s too soon to tell if that’s going to happen,” LaViolette was quoted saying.
Stalled process despite ‘Republican-controlled government’
At the MedTech Conference, the panel of experts expressed their views on this tax and detailed potential ways to get rid of it quickly.
“[E]veryone supports its repeal, and yet here we are again two years later with a Republican-controlled government and (being) unable to having something permanent probably speaks to the fact we’re not where we should be,” LaViolette said.
According to Bloomberg, Scott Whitaker, chief executive officer of the Advanced Medical Technology Association (AdvaMed), said the plan is to “start of legislative language or an amendment that could be added on to a five-year funding extension for the Children’s Health Insurance Program (CHIP).”
Variety of options to get rid of tax according to medical device experts
Whitaker said the tax itself could simply be repealed on its own. “A third option, Whitaker said, would be to include a device tax repeal in an omnibus spending bill that packages appropriations and related bills into one single bill that would need to pass both houses of Congress,” Bloomberg wrote.
Mark Leahey, president chief executive officer of the Medical Device Manufacturers Association (MDMA) said the new agency core agency leads, FDA commissioner Scott Gottlieb and secretary of Health and Human Services Tom Price see the value to remove this tax.
With Senate elections taking place next year, the panel advocated for the removal of the tax before the end of the year. The medical device sector saw the Trump presidency, alongside a Republican Senate and Congress, as a positive signal to complete the repealing effort for the tax.
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Securities Disclosure: I, Bryan Mc Govern, hold no investment interest in any of the companies mentioned.