ANN ARBOR, Mich.--(BUSINESS WIRE)--MichBio, the statewide industry association representing the biosciences, applauds yesterday’s passage by the U.S. House of Representatives of H.R. 184 – The Protect Medical Innovation Act of 2017. It passed overwhelmingly by 283 to 132 with 57 Democrats joining 226 Republicans in support. MichBio thanks all members of the U.S. House Michigan delegation who supported this legislation.
The permanent repeal of the Medical Device Tax has been a top policy priority of MichBio since it took effect as part of the Affordable Care Act (i.e., “Obamacare”). in 2010. It invoked a 2.3% tax on sales of all medical device products sold in the U.S. that resulted in job cuts, suspension of capital expansions, reduction or elimination of net profits, and generally constrained growth. Ironically, none of the tax revenues were directed to lowering healthcare costs; instead they were collected into the U.S. Treasury’s general fund. In addition, given that it was established as excise tax, the U.S. Government mandated company tax payments on a bi-weekly basis, rather than quarterly or annually. This in turn placed an inordinate administrative and financial burden on reporting companies, especially small businesses.
Since the law’s original passage, MichBio worked closely with its national industry partners, the Advanced Medical Technology Association (AdvaMed) and Medical Device Manufacturers Association (MDMA), along with other state and regional organizations, to ensure that Michigan’s federal delegation understands the effect of a 2.3% excise tax on slowing business growth and innovation in the medical device industry, and ultimately on the patients that benefit from these life-saving technologies.
MichBio engaged Michigan’s federal delegation through regular meetings on Capitol Hill, multiple letters signed by member medical device companies, legislative roundtables and webinars, and tours to numerous Michigan medical device manufacturers for our Members of Congress. These activities and similar ones around the country, led Congress to suspend the tax in 2015 for two years, a suspension that was successfully renewed through the end of 2018. However, the uncertainty of a permanent solution continued to provide instability in business growth plans and investment, hence the need for permanent repeal.
Because of MichBio’s efforts, and those of others, repeal of this tax now enjoys broad, bi-partisan support in Congress. Ten of Michigan’s 13 sitting members of the House of Representatives voted to support the legislation in yesterday’s vote.
While the path to passage in the U.S. Senate is uncertain, this is an important step in permanently repealing this destructive tax.
“The overwhelming, bipartisan support for full repeal medical device tax sends a strong message that lawmakers recognize this tax is not good health nor good fiscal policy. We know a significant majority of the Senate feels the same way, and we look forward to working closely with Senator Stabenow and Senator Peters to quickly take up this measure and ensure that Michigan’s medical technology industry continues to bring innovation to patient care across the country and around the world,” said Dr. Stephen Rapundalo, MichBio President and CEO.
MichBio thanks all its members who engaged on this issue and advocated for its repeal.
MichBio is the trade association committed to driving growth in Michigan's biosciences industry and its many sectors, including agri-biotech, food and nutrition, bio-based technologies and renewable chemicals, industrial and environmental biotech, medical devices and technologies, pharmaceuticals and consumer healthcare, diagnostics and research products, testing and research services, and clinical research. MichBio members include bioscience companies, academic and research institutions, clinical/health centers, bioscience service providers, and related organizations. For more information, visit www.michbio.org or follow us on Twitter @MichBio.