It’s done. With the signing into law of the latest federal spending deal, the long-term specter of a 2.3% excise tax on medical devices has been banished. Following several suspensions, renewals and moratoriums over its lifetime, the tax had been set to go back into effect at the turn of the year.
First passed as part of the Affordable Care Act—and initially enacted for three years starting in 2013—it was pegged to the sales of certain products by manufacturers and importers. It excluded eyeglasses, contact lenses and hearing aids, as well as those generally purchased at the retail level by consumers.
“This is a great day for American patients, American jobs, and American innovation: The medical device tax is officially history,” said Scott Whitaker, president and CEO of the Advanced Medical Technology Association, commonly known as AdvaMed.
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The industry lobbying group had estimated that the tax would have totaled about $25 billion over 10 years and cited analyses from the Tax Foundation saying it could have cost more than 21,000 jobs in the near future had it taken effect permanently. Its repeal was also urged by groups including the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers.
“With the end of this burdensome tax, the U.S. medtech industry can do what it does better than anyone else in the world: develop life-changing innovations that save and improve patients’ lives, and create high-paying, high-tech jobs to keep the American economy booming,” Whitaker said in a statement.