How the pause in medical device taxes helps medtechs grow

The two-year pause on the medical device tax has shown significant benefits for medtechs, so much so that many companies are calling for a permanent repeal of the tax.

In December 2015, President Barack Obama signed an omnibus tax and spending bill into law, suspending the 2.3 percent tax on all U.S. medical device sales for two years. The tax was implemented in 2013 to fund the Affordable Care Act.

Medical device companies say the pause has allowed them to speed up development of new products, expand clinical programs, increase the size of their workforces and spend more money on research and development.

The Medical Imaging & Technology Alliance recently surveyed 13 executives representing more than 60 percent of U.S. medical imaging companies. About 77 percent of respondents said they were likely to speed up the development of new products, while 69 percent said they would increase their workforces as a result of the tax suspension.

"Full repeal of this burdensome tax will turn yesterday's economic headwinds into tomorrow's tailwinds, spurring sustained growth and protecting patient care," said Nelson Mendes, president and CEO of Orlando, Fla.-based Ziehm Imaging and chairman of the Medical Imaging & Technology Alliance. "We appreciate the bipartisan efforts of Congress to address this tax and urge them to vote for full repeal when the time comes."


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