Donnelly: ‘Past Time to Repeal the Medical Device Tax’

Senator announces support for reintroduction of bipartisan Medical Device Access and Innovation Protection Act that would help Hoosier medical device industry

Tuesday, January 13, 2015

Washington, D.C.— U.S. Senator Joe Donnelly announced his continued support for bipartisan legislation reintroduced today that would repeal the medical device tax. Donnelly joined U.S. Senators Orrin Hatch (R-UT) and Amy Klobuchar (D-MN) and seven other senators from both parties sponsoring the Medical Device Access and Innovation Protection Act, the same legislation they introduced in 2013.

Donnelly said, “It is past time to repeal the medical device tax. I am pleased to continue supporting this bipartisan legislation and am hopeful that the Senate will act quickly to consider it. We must encourage continued job growth in our manufacturing sector, including the medical device industry. Indiana is home to many innovative medical device companies, which together employ about 20,000 Hoosiers. Repealing the medical device is a top priority because it would make a difference for Hoosier businesses, workers, and patients who use their products.”

The medical device industry accounts for more than 40 percent of the jobs in Indiana’s life sciences industry, making Indiana the fifth largest state in the country in percentage of medical technology sector jobs, according to a 2012 BioCrossroads report. The same report found that the state’s medical device industry generated more than $10 billion of annual economic output.

A 2.3 percent medical device tax went into effect on January 1, 2013, under the Affordable Care Act. Currently, the tax is levied on the sale price of any medical device as defined by the Food and Drug Administration. Products subject to the tax include items ranging from surgical drapes and catheters to advanced imaging equipment.

Donnelly has long been a strong supporter of repealing the medical device tax and has heard firsthand about the effects of the tax on Indiana, where a number of companies have foregone expansion or contemplated moving jobs outside the United States. Donnelly was an original cosponsor of S. 232, the Medical Device Access and Innovation Protection Act in 2013, which would have repealed the medical device tax. In March 2013, Donnelly voted for a bipartisan budget amendment in support of repealing the medical device tax.

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