The 2.3% tax on medical devices is a thing of the past. Now, Mark Leahey, president and CEO of the Medical Device Manufacturers Association (MDMA), has revealed to BioWorld that the supporters of the Affordable Care Act (ACA) saw the tax as little more than “a spreadsheet exercise” in financing the more costly elements of the legislation.
The much-maligned medical device tax was finally laid to rest Dec. 20, as President Donald Trump signed a spending bill that included a permanent repeal of the tax. The 2.3% excise tax on devices was brought into the statute via the Affordable Care Act (ACA), and its repeal brings much-needed breathing room to small device makers.
Wells Fargo Securities LLC recently published The MedTech Manual – 2020 Outlook, in which it says the medical device sector “will continue to be a port in the storm because the political focus will remain on drug pricing and increasing access to [health care].” Overall, the industry has performed quite well in comparison with other health care sectors during 2019. The financial firm’s senior analyst Larry Biegelsen and colleagues wrote that they expect the medical device sector to continue moving in a positive direction despite Medicare for All (MFA) rhetoric and an upcoming presidential election.
The U.S. House of Representatives passed two spending packages that boosted funds for both the FDA and the NIH, but device and generic drug makers saw other benefits. The House legislation would allow makers of biosimilars and generic drugs to sue brand names for blocking access to the index article, but also repealed the medical device tax, a change that would bolster development of the novel therapies that are the industry’s lifeline. Both spending bills carry numerous provisions related to the health care economy and will go to the Senate for passage, hopefully before the government runs out of money Dec. 20.