Some House Dems back device tax repeal to get government running again

A movement to repeal the 2.3% medical device tax as part of a compromise to get the government running again is gaining some ground, and Democratic support, in the House.

The Wall Street Journal reports that a group of House Democrats has publicly thrown its support behind the idea, the first time since the government ran out of money and shut down on Oct. 1 after failing to pass a continuing resolution to fund operations.

Their pitch comes a few days after Sen. Dick Durbin (D-IL), the Senate's majority whip, said on CNN that a repeal of the tax could return to the table as part of a government funding compromise. But this would come with conditions, including a vote to repeal the tax that would be separate from any measure to fund the government. Durbin also stressed that funding must be found to replace the nearly $30 billion in revenue the tax would generate to help fund the Affordable Care Act over 10 years.

The House Democratic group said it has the funding issue covered. According to the WSJ, the Democrats recommend offsetting a repeal of the tax by extending what's known as a pension stabilization provision that had been part of a transportation authorization bill passed by the Senate at another time.

How many House Democrats joined this effort? That's unclear. Their proposal is outlined in a letter to House Speaker John Boehner (R-OH) and House Minority Leader Nancy Pelosi (D-CA), and signatures are still being added to the document, the WSJ explained.

A repeal of the device tax is still not a sure thing. Before the government shutdown, Republicans and an increasing number of Democrats in both wings of Congress supported a repeal. But most Democrats, at least publicly, have been opposed to making any changes to the Affordable Care Act as part of any compromise to get the government running again. Even some Republicans have come out in support of passing a government funding bill devoid of riders such as the device tax repeal.

The medical device industry and its supporters have long pushed for a repeal of the tax, arguing it hampers job growth and innovation. Supporters countered that certain sectors of the industry would gain based on added business created by the health insurance expansion at the centerpiece of the Affordable Care Act. Either way, the government funding stalemate continues, and so does the push to repeal the device tax. And as the issue drags on, both elements are becoming increasingly intertwined.

- here's the full WSJ story (sub. req.)

BD&L Summit

Deal-Making Insights for the Life Sciences Industry

Bringing together key deal-makers and serving as an open forum for cross-functional business development and legal teams to share valuable insights and actionable strategies on successfully managing alliances, licensing agreements, and M&A deals.