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Rep. Love urges Senate to permanently repeal medical device tax

FILE - Rep. Mia Love, R-Utah, speaks on the Senate Floor, Thursday, Feb. 22, 2018, at the Utah State Capitol, in Salt Lake City.
FILE - Rep. Mia Love, R-Utah, speaks on the Senate Floor, Thursday, Feb. 22, 2018, at the Utah State Capitol, in Salt Lake City. Flanked by medical technology sector professionals at Merit Medical Systems headquarters on Monday, Rep. Mia Love called on the U.S. Senate to move quickly to repeal the Affordable Care Act's medical device tax.
Rick Bowmer, Associated Press

SOUTH JORDAN — Flanked by medical technology professionals, Rep. Mia Love called on the U.S. Senate to move quickly to repeal the Affordable Care Act's medical device tax, saying it unduly interferes with innovation in the state.

The Protect Medical Innovation Act of 2018, which would permanently repeal a 2.3 percent tax on certain types of medical equipment that went into effect in 2013, easily passed late last month in the U.S. House of Representatives with the support of all of Utah's representatives. The House passed the bill 283-182, with just one dissenting Republican vote and the support of 57 Democrats.

The medical device tax was designed to apply to everything from MRI machines to pacemakers to surgical equipment, with carved out exceptions for common retail medical items like eyeglasses, hearing aids and band-aids. Two prior bills passed by Congress have placed a moratorium on the tax, rendering it inactive since the beginning of 2016.

The latest bill, sponsored by Rep. Erik Paulsen, R-Minnesota, would do away with the tax forever. Love and 222 other members of the House of Representatives joined as sponsors of the measure on the day it was first introduced in early 2017. She was also part of a push earlier this year to get House leadership to include an extended moratorium on the tax inside a spending bill.

Love, R-Utah, said Monday at Merit Medical Systems headquarters that medical technology manufacturing companies, which feel the full brunt of the tax, contribute $5 billion per year to the state's economy and provide Utahns with more than 10,000 good jobs.

"This is not just about trying to preserve the industry. It really is about looking no further than our neighbors, and the people that work here, and those that are doing everything they possibly can to make sure that they're able to feed their families and grow and thrive," Love said. "And remember, this is not just about the companies that we're trying to save — this is about medical technology that is saving lives."

The latest moratorium on the medical device tax lasts until the end of 2019. But medical technology companies such as Merit Medical — a South Jordan-based company that calls itself "a leading manufacturer and marketer of disposable medical devices" — are anxious to see a permanent repeal of the tax while political support is strong.

In a response to Love's public urging of the Senate on Monday, her Democratic opponent, Salt Lake County Mayor Ben McAdams, issued a statement saying he also supports a permanent repeal of the medical device tax.

"Its repeal has bipartisan support, including from me. Innovative Utah companies such as (Becton, Dickinson and Co.), Edwards Lifesciences and Merit Medical employ over 10,000 Utahns and are leaders in medical technologies that help improve health outcomes for people worldwide," McAdams said.

"The products these companies manufacture play an important role in addressing some of our country’s most critical health care challenges. As mayor, I have been a supporter of these companies, including backing their call for repeal of this tax."

Though it is currently inactive, the medical device tax "continues to loom … over our companies," which significantly complicates long-term planning, said Greg Fredde, executive vice president of business development for Merit Medical.

"It makes it very difficult for our companies to plan research and development projects. Many of these projects take five, seven, 10 years," Fredde said.

He also called the tax "punitive" and said it was a "tax on innovation."

Love said she doesn't want the Senate to be complacent about voting for a permanent repeal. She said she sees "an urgency" to get it done while Sen. Orrin Hatch, a strong opponent of the tax and the chairman of the influential Senate Finance Committee where the House bill will be heard next, is still in office.

"If there's anybody that can do it (by that time), it's certainly Sen. Hatch," Love said. "He has not slowed down since he announced his retirement."

If Congress acts slowly and the medical device tax eventually reactivates, "it's really hard to come back from the cost" that it will incur on manufacturers, she said.

Standing alongside Love on Monday, South Jordan Mayor Dawn Ramsey told reporters that medical technology development and manufacturing is an important part of the makeup of the city.

"It has an impact close to home for us. It affects our micro-economy here in South Jordan," Ramsey said.

American medical technology companies Becton, Dickinson and Co., Edwards Lifesciences, and Stryker Corp., each of which have a presence on the Wasatch Front, also accompanied Love Monday to show support for a permanent repeal of the medical device tax.