Market Overview

MichBio Applauds House Vote Repealing Medical Device Tax


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
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