The Medical Device Excise Tax: Three Potential Outcomes

The battle to repeal the medical device excise tax (MDET) has been a significant focus of the medical device community since the Affordable Care Act (ACA) was enacted on March 23, 2010. At that time, Congress included a 2.3% excise tax on medical devices to help cover the costs of the expanded health insurance coverage mandated under the ACA. Efforts to repeal the MDET began almost as soon as the ACA was enacted. The medical device industry largely criticized the MDET, insisting that the tax would harm R&D investment and performance, and thus argued it should be abolished. Although there has been significant agreement in the medical device industry to abolish the tax, it remains an ever-present concern for the industry. In July 2018, the House of Representatives voted to repeal the MDET. In this article, we provide a history of the MDET and its related repeal efforts, an overview of the present costs associated with the current state of the MDET, and possible outcomes of the MDET. Brief History of the MDET and Repeal Efforts The ACA was signed into law by former U.S. President Barack Obama on March 23, 2010. It included three key mandate provisions to expand health insurance coverage to universal levels. To help cover the costs of the expanded health insurance coverage, the ACA also included new taxes and fees imposed on several business sectors. Section 4191 of the Internal Revenue Code imposed a 2.3% tax on the sale price of “any taxable medical device...
Source: MDDI - Category: Medical Devices Authors: Tags: Regulatory and Compliance Source Type: news