R&Q's Blog

Medical device industry news and trends - and the resources to understand and act on them.


NEWS: Bill Introduced to Improve FDA's Medical Device Inspection Process

Senator Johnny Isakson [R-GA]

Note: This post is written by Jake O'Donnell, Senior FDA Compliance Principal at R&Q. Jake has more than 20 years of experience working for the FDA. We hope his commentary brings a useful perspective to the new bill.

Anytime there is an administration change in the federal government, thoughts turn to potential changes in the regulatory environment. With a Republican chief executive and majorities in the 115th Congress, this year is no exception. On February 15th, Senator Johnny Isakson [R-GA] introduced S.404: a bill to amend the Federal Food, Drug, and Cosmetic Act to improve the process for inspections of device establishments and for granting export certifications.

On the Edge of Our Seats

As the government shutdown dragged onward, nobody was watching the outcomes more than medical device manufacturers. For device manufacturers – there was and still is a lot at stake. And make no mistake – the medical device tax is part of the hot debate in Washington right now. Part of the 2010 Affordable Care Act included a 2.3% tax on medical devices. The tax has caught a lot of attention from both Republicans and Democrats – part of the most recent House GOP proposal to end the partial government shutdown actually includes a deal to suspend this medical device tax for two years. The revenue from this tax is to be utilized to help fund the Affordable Care Act.
The tax has not been fully supported by either party – back in 2010, 30 Democrats joined Republicans and opposed the medical device tax. However, there are very worthy arguments against the device tax & defending the device tax, which I will not explore in this article but are referenced on Newsreplubic.com. (Source: News Republic “Is Obamacare’s Medical-Device Tax Up for Negotiation?”)
Why hasn’t the tax been nixed in general you might ask? Mainly, we haven’t found an alternative source of tax revenue that would replace what the medical device tax would provide, as it raises approximately $30 billion over 10 years and is a large part of the funding for the Affordable Care Act.
In most recent news (Late Tuesday, 10/15), the tax has been cut from the latest House Republican offer; meaning the two year delay might be scrapped altogether. However – it has been in and out of several offers from both Republicans and Democrats for the last several months. (Source: The Washington Post “GOP leaders nix medical device tax delay”). As of this most recent news – it is not looking good for device manufacturers as far as delaying the tax; however, as we’ve already found out – a lot can change in a short amount of time. -SJG

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