RX for R&D: Repealing the Medical Device Tax

As Obamacare’s growing pains have occupied headlines for the last month, one key aspect of its rollout has fallen by the wayside: the ill-considered medical device excise tax used to help fund the ACA, the debate over which illustrates the importance of, and the many misconceptions about, the American medical device industry. As part of the 10-year, trillion-dollar-plus expansion of government-subsidized health care, Obamacare imposes a 2.3 percent levy on revenues from qualified medical devices, a tax that came into effect on January 1 and that is expected to raise about $30 billion over the next decade. Medical device trade groups estimate the tax will cost some 43,000 jobs—more than 10 percent of all jobs industry-wide—by eating directly into spending on research and development, which amounts to $10 billion annually.

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