Letter from Senator Pat Toomey re: The Medical Device Excise Tax

October 26, 2017

Dear Frank,

Thank you for contacting me concerning the medical device excise tax. I appreciate hearing from you.

Pennsylvania is currently the fourth-largest producer of medical devices in the country and home to 614 medical device companies. The industry has the potential to create tens of thousands of new jobs in Pennsylvania and across the country. America is the global leader in medical device research and development, but a 2.3 percent excise tax on device sales contained in former President Obama's health care law threatens jobs, innovation, and ultimately, patients.

This tax is poorly designed because it applies to a business' revenue - not just profits - which directly penalizes small, up-and-coming companies that have not yet broken even on their investments. This tax is not only resulting in companies having less money with which to hire new workers, it is also preventing the development of potentially life-saving technologies.

For these reasons, I am committed to the repeal of this harmful tax and remain optimistic we can accomplish this goal. I have voted on several occasions to repeal Obamacare's job-killing regulations and taxes, including the medical device tax, most recently on July 28, 2017. Unfortunately, these measures did not gain enough support to pass the Senate. I am disappointed with this setback in the efforts to repeal this ill-conceived tax and I will continue to work towards relief for medical device manufacturers and the patients they serve. I am an original cosponsor of the bipartisan Medical Device Access and Innovation Protection Act (S. 108), which was reintroduced on January 12, 2017 and would repeal the medical device tax outright. I promise to continue to work to pass this important measure and send it to the President for his signature.

As you may know, the application of the medical device tax was delayed for two years as part of a major tax and government funding measure that passed the Senate on December 17, 2015 by a vote of 65-33.  This measure was subsequently signed into law.

I will continue working with colleagues on both sides of the aisle for full repeal this destructive tax and defend the high-paying Pennsylvania jobs depending on medical device sector's vitality. Thank you again for your correspondence. Please do not hesitate to contact me in the future if I can be of assistance.

Sincerely,
 

Pat Toomey
U.S. Senator, Pennsylvania