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Public Policy Newsletter Article

Congress Permanently Repeals Medical Device Tax, Funds Government

  • 2019-12-19T03:54:00.000+0000
  • Washington DC
  • Author: Laure Fabrega

Today, Congress passed historic legislation that permanently repeals the 2.3 percent medical device excise tax, which was established by the Affordable Care Act of 2010 (ACA). The tax applies to the sale of medical devices and was expected to cost the industry $30 billion over 10 years. Recognizing the detrimental effects of the tax on innovation, jobs and the economy, Congress suspended it in 2016 and 2017 and again in 2018 and 2019, but Biocom kept speaking against the impact of short-term patches and continued to advocate for a full repeal. Absent its repeal, medtech companies would have resumed payment to the IRS in January 2020.

The tax repeal was included in an end-of-year bipartisan spending package, “H.R. 1865 as amended”, which contains eight appropriation bills to fund the government until the end of the fiscal year: Agriculture-FDA, Energy-Water, Interior-Environment, Labor-HHS-Education, Legislative Branch, Military Construction-VA, State & Foreign Operations and Transportation-HUD. Another spending bill, “H.R. 1158 as amended” covers the remaining four: Commerce-Justice-Science, Defense, Financial Services and Homeland Security funding. Passage of these two bills means the federal government will be funded in its entirety until the end of September, averting a government shutdown. The House passed H.R. 1865 by a 297-120 vote on December 17. The Senate approved the bill by a 71-23 vote on December 19.

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nder H.R. 1865, the National Institutes of Health (NIH) will receive $41.7 billion in FY2020, a $2.6 billion increase, while the Food and Drug Administration (FDA) will receive $3.171 billion, a $91 million increase. Biocom had been advocating all year for increased funding for these agencies. The bill also includes the CREATES Act, which allows generic-drug developers to bring civil actions against brand-name manufacturers for not selling them drug samples.
The bill also provides much-needed relief to the biofuels industry by retroactively extending incentives for advanced and cellulosic biofuels, including the second generation biofuel producer credit, the special allowance for second generation biofuel plant property credit, and the biodiesel and renewable diesel credit.