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MDMA Survey Highlights the Damage of Device Tax Reinstatement to Innovation and Jobs

Thursday, June 20, 2019  
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MDMA Survey Highlights the Damage of Device Tax Reinstatement to Innovation and Jobs


WASHINGTON, DC – The Medical Device Manufacturers Association (MDMA) released the results of a survey of over 100 medical technology innovators that shows the devastating impact the medical device tax would have on patient care and innovation if it is reinstated on January 1, 2020.  Notably, 82 percent of respondents shared that if additional relief was not secured by September 30, 2019 they would need to begin taking negative steps to prepare for the tax.   


“We will never fully repair the damage caused when the medical device tax was in place from 2013-2015, but we must ensure that patient care is never punished again by a policy that diverts billions of dollars in investments away from innovation,” said Jeff McCaulley, Global President of DJO Surgical and Chairman of the MDMA Board of Directors.  “In order to fully empower medical technology innovators to deliver the cures and therapies of tomorrow, Congress needs to once and for all put an end to the medical device tax.”


While the tax has been suspended twice, the medical device tax is set to be reinstated on January 1, 2020 if no action is taken, diverting billions of dollars away from investments in patient care, R&D and job creation.  The MDMA survey includes over 100 responses from senior executives at some of the United States’ most innovative and entrepreneurial medical device companies.


Top findings include:

  • 85 percent of respondents would cut or freeze R&D investments to address the tax
  • Of those respondents, the average cut to their R&D budget is 15.8 percent
  • 56 percent of companies with revenues that responded would cut or freeze salaries for their employees as well to address the medical device tax 

“At a time where there is so much division among policy makers over how to improve health care and spur innovation, the full repeal of the medical device tax is a rare example where an overwhelming, bipartisan majority in Congress agrees on what needs to be done,” added McCaulley.  “This survey highlights the negative impacts a reinstatement of the medical device tax would have, and we simply cannot allow this to happen.”    


The damage the medical device tax causes is clear, with the Department of Commerce noting that the medical technology ecosystem lost 28,000 jobs during the time the policy was in place.


Last Congress, the House voted to repeal the tax by a vote of 283-132. Currently, the House has introduced bipartisan legislation to repeal the medical device tax and has 239 co-sponsors. The Senate has a companion bipartisan bill, with 33 co-sponsors, including 10 Democrats.