MITA supports research denouncing US medical device tax

A new study by the Pacific Research Institute (PRI) showing that the Affordable Care Act’s medical device tax is significantly flawed has gained support from the Medical Imaging and Technology Alliance (MITA), according to a recent MITA news release.  

“As the congressional session winds down, Congress has some unfinished business – taking action to repeal the medical device tax,” study author Wayne Winegarden, a senior fellow in business and economics at PRI, said in a prepared statement. “The medical device tax is bad tax policy that has increased patient costs, reduced access to life-saving technology and reduced profits and jobs.” 

His paper concludes that the currently suspended 2.3 percent excise tax on the sale of medical devices including imaging equipment tax is “a failure” and “violates the core principle of tax neutrality”.  

Winegarden’s supporting analysis cites recent data showing Congress overestimated their anticipated revenue from the tax and instead collected $2.1 billion below estimates between 2013 and 2015.  

The tax, Winegarden noted, has led to lower investment in research and development in new medical technology, a larger burden on start-up companies with thinner profit margins, a significant decline in industry sales and tens of thousands of lost jobs. He concluded that that Congress should repeal the tax permanently to increase medical innovation and quality of patient care.   

“A substantial bipartisan majority of U.S. Representatives voted overwhelmingly to permanently repeal the medical device tax in July,” said Joe Robinson, chairman of the MITA Board of Directors and senior vice president of health systems solutions at Philips. “We ask the Senate to finish the job this year and vote to permanently repeal the device tax.” 

Since it went into effect in 2013, Congress has suspended the medical device tax twice, but companies have still faced uncertainty around its re-implementation, according to MITA. 

For a more in-depth analysis read HealthImaging's takeaways from the PRI study here.