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No action yet, but opposition still brewing to medical device tax

By: Gayle S. Putrich

April 11, 2014

WASHINGTON — Indiana politicians are stepping up their game in attempts to get the much-maligned medical device tax repealed.

In a letter ostensibly about congratulating newly appointed chairman of the Senate Finance Committee Ron Wyden (D-Ore.), Sen. Joe Donnelly (R-Ind.) pressed for bipartisan Senate action to kill the 2.3 percent excise tax on medical devices that became law as part of the Affordable Care Act in 2010.

“Indiana is home to many innovative medical device companies, which collectively employ 20,000 Hoosiers. I have seen first-hand the effects of the tax on my state, where a number of companies have foregone expansion and others have contemplated moving jobs outside the United States,” Donnelly wrote. “I support tax policies that promote American jobs and innovation, and I look forward to working with you and our colleagues on both sides of the aisle to address this important issue.”

Wyden was one of 33 Senate Democrats who joined with all the Republicans in the Senate in a non-binding vote opposing the tax in March. Despite the open opposition, so far no formal legislation to end the tax has been penned.

Indiana’s governor has also been pressing Washington for a repeal of the tax he says is stifling innovation and harming the Hoosier job market.

“This thriving industry should be allowed to innovate and grow, rather than be hampered by an industry-specific tax,” Pence wrote in his third anti-medical device tax letter to President Obama in three years.

The Indiana politicians say more than 20,000 direct jobs make up Indiana’s $55 billion life sciences industry, which is already being threatened by the new tax. Bloomington, Ind.-based Cook Medical, Inc. last year cancelled plans for five new plants that would have employed about 200 people each in the face of their higher tax bill.

The White House has said that medical device manufacturers can afford the tax since more people with insurance will mean more paying customers for medical devices and services.