Medical Device Industry Hopes Intense Lobbying Will Overturn Excise Tax

Members from the medical device industry are lobbying lawmakers in hopes of passing one of five bills that would nix the 2.3 percent excise tax that would be levied on device makers, according to a Kaiser Health News report.

The 2.3 percent excise tax on medical device companies, which is part of the healthcare reform law, is expected to turn up approximately $20 billion, which would go toward paying for the extended healthcare coverage under the reform law. In addition to overturning the excise tax, medical device makers are lobbying the IRS, urging it to exempt hundreds of devices from the excise tax. The healthcare reform law currently extends an exemption only to devices that are in high demand, such as contact lenses and eyeglasses, according to the news report.

Although the medical device industry is ready to spend large sums of money to lobby against the excise tax, George Schutzer, a tax lobbyist and attorney at the Washington firm Patton Boggs, doubts the device tax will be overturned. Such a move would "open the flood gates" for others wanting to challenge the reform law, he said. For this reason, the industry is turning to the IRS for possible relief.

While device makers seek exemptions and a turnover of the device tax, hospitals and group purchasing organizations are concerned that a higher device tax will lead to higher prices when they negotiate business deals with the device companies. Curtis Rooney, president of the Health Industry Group Purchasing Association, said device companies should not be allowed to pass the tax onto consumers, according to the news report.

Read the news report about the medical device industry.

Read other coverage about the medical device industry:

- GAO Publishes Report on FDA's Premarket Review and Postmarket Safety Efforts

Device Makers' Confidentiality Will Raise Costs, AHRMM Says

MDMA: GPOs Should Be Included in "Sunshine" Provisions

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