Congressional Opposition to Medical Device Tax Grows

A test vote in the U.S. Senate on March 21 shows significant numbers of Democratic lawmakers now are joining Republicans in opposing the health reform law’s 2.3 percent sales tax on medical devices.

The non-binding vote to repeal the tax during work on a budget bill was 79-20 with support from 33 Democrats, nearly two-thirds of the caucus.

The tax is designed to raise up to $29 billion over a decade to pay for some reform programs. Medical device manufacturers, however, have lobbied against the tax for three years and now are gaining traction as it became effective in January 2013. Manufacturers argue the tax will stifle innovation and cost jobs, and lawmakers on both sides of the party are getting the message.

The New York Times notes that one of the leading Democrats opposing the tax is Sen. Amy Klobuchar of Minnesota, where an estimated 400 device companies employ 35,000. The House has previously voted to repeal the tax, but a vote, even a test one, has never before come up in the Senate.

House Republicans held a series of hearings this week on likely expanded Food and Drug Administration regulation of medical devices to include certain medical mobile apps, and also took on the device tax. In testimony on its evolving mobile app program, an FDA representative noted that questions about the impact of the device tax on the mobile app market should be raised with the Internal Revenue Service.