The U.S. House of Representatives passed legislation this week to permanently repeal the medical device excise tax.

In a vote of 238-132, congress members from both parties voted Tuesday in favor of the Protect Medical Innovation Act, authored by Rep. Erik Paulsen (R.-Minn.), which, if passed, would eliminate the 2.3 percent fare levied on sales of goods produced by medical equipment manufacturers.

“Today's vote is a win for American innovation, American jobs, and most of all for American patients, who benefit from the life-changing innovations our industry produces every day,” Scott Whitaker, president and CEO of the Advanced Medical Technology Association (AdvaMed) said in a statement. “We commend Rep. Erik Paulsen and a number of leaders from both sides of the aisle for their commitment to permanently repealing this onerous tax and for working to ensure our member companies have the long-term certainty they need to invest in R&D, hiring and other capital improvements to create the next generation of treatments and cures.”

Enacted in 2013 under the Affordable Care Act, the tax levies a 2.3 percent fee on manufacturers, producers and importers for the sale of a product. A bipartisan coalition voted in 2015 to delay the tax by two years, only to delay it once more in 2017 for another two years, just days before the first payments under the tax were due.

Critics have argued for a permanent repeal of the tax on the grounds that it cuts jobs in the medical device industry, creates an unfair competitive landscape, and hinders innovations for patient care in development and research.

A survey conducted by the National Electrical Manufacturer Association, the parent company of Medical Imaging & Technology Alliance (MITA), in 2016 found almost 70 percent of firms in favor of permanent repeal, specifying that such action would make them more than likely to hire in the future. In addition, 60 percent specified that resources used to cover the tax could be applied as funding for additional research and development.

“Today’s vote demonstrates that protecting America’s medical technology industries, and the patients their products serve, is essentially a nonpartisan matter,” Patrick Hope, executive director of MITA, said in a statement. “The Senate should quickly take corresponding action and vote to send permanent repeal legislation to the president. It is the best possible way to end the uncertainty that has stifled investments in hiring and R&D for too long.”

Hope previously told HCB News in January that job losses had ticked up to nearly 29,000 as a result of the medical device tax with another 25,000 predicted to be lost by 2021, according to findings of a study conducted by the American Action Forum.

Supporters, though, have called these figures overstated, backing up their arguments with evidence such as a 2015 Government Accountability Office report which found sales under the tax to be rising rather than declining. Such a trend they said could be due to coverage expansion under the ACA, boosting potential markets for their products, and that repeal will prevent the accumulation of necessary funding for healthcare costs.

Repeal of the tax has the backing of the Trump administration, a staunch opponent of the ACA, as evidenced in a letter obtained by the Washington Examiner in which the administration refers to the fee as a danger to U.S. jobs and patient care, and a threat to the country’s status as a leading player in the global healthcare arena.

"Repealing this tax would lower healthcare costs, save American jobs and promote a patient-centered healthcare system," the letter reportedly reads. "This tax is an obstacle for patients seeking access to medical advances, and threatens to undermine the position of the United States as the global leader in healthcare investment and innovation."

A total of 57 Democrats joined 226 Republicans to vote in favor of the Protect Medical Innovation Act, also referred to as H.R. 184. It will next head to the Senate to be voted on and if passed, will then be sent to President Donald J. Trump to be signed into law.

Patrick Riley, transformational health principal consultant and analyst for the marketing research consulting firm Frost & Sullivan, told HCB News that bipartisan support for repeal will almost undoubtedly guarantee passage of the legislation on the Senate floor when it resumes following its recess.

"From an industry perspective, it’s a bad idea. We don’t need an excise tax on medical devices, manufactured or imported within the United States," he said. "There’s no need for it. There are a couple of studies done that showed we would lose jobs as a result of it. Not only that but it would be a deterrent to entrepreneurs in the industry and that’s critical to medical devices or start-ups that have new ideas for patient monitors and other important devices."

He says that the tax creates more challenges for states that are looking to expand Medicaid and take on the fiduciary responsibility for the execution of federal funds for Medicare.

Echoing his sentiments is Bruce Carlson, publisher of the healthcare market research publication Kalorama Information, who says doing away with the tax will allow the industry "to breathe a sigh of relief" as it will allow companies to spend more on R&D and will generate greater appeal of medical device projects among venture capitalists.

He adds though that should it or a similar policy be enacted again, smaller companies should be exempt from the law. "One error made when the law was enacted was to fail to exclude small companies with few employees. The tax could be shouldered by large companies to an extent, but for small companies, it erased badly needed profit."

The tax is currently suspended, a status that is set to expire on January 1, 2020.