2.3% DEVICE EXCISE TAX IS BACK (Orthopedics This Week)
After a two-year suspension, the dreaded 2.3% excise tax on medical device manufacturers returned on January 1, 2018.
The tax was originally imposed in 2013 as one of several taxes and fees in the Affordable Care Act (ACA) that pays for expanded health insurance.
The device industry association, AdvaMed, has been fighting the tax tooth and nail and had secured bipartisan support from red and blue state U.S. senators with significant device manufacturers to permanently repeal the tax.
But the Republican majority in the Senate did not include the repeal in the recently passed $1.5 trillion tax overhaul that cut corporate income tax rates 14%, from 35% to 21%.
Wall Street analysts and industry lobbyists have disagreed about the impact of the tax on device makers. Some analysts argued that increasing procedure volumes due to more patients covered by insurance would make the tax a financial wash for most device makers.
AdvaMed argued that the tax would take $20 billion out of the industry over the next decade and hurt innovation and employment. “What we have seen from past experience is that it comes out of funding for product devel...
