Top issues from 2019 AdvaMed Washington Fly In and what they mean to Georgia’s life science community

March 15, 2019

Two weeks ago, Georgia Bio VP of Business Development and External Affairs Joseph Santoro participated in a Washington fly in to discuss, educate and learn from Congressional legislators, lobbyists and other industry colleagues about the medtech policy climate in the nation’s capital.

He shares with us the following top takeaways as formally shared by AdvaMed and a few brief notes about what they mean to the Georgia ecosystem.

Medical Device Tax – Need for Repeal

The medical device excise tax is a 2.3% excise tax on the sale of certain medical technology that was enacted as part of the Affordable Care Act. While the tax took effect in January 2013, it has been suspended twice, with the most recent moratorium set to expire at the end of the year and U.S. lawmakers are looking for a permanent repeal. U.S. Senators Pat Toomey (R-Pa.) and Amy Klobuchar’s (D-Minn.) bipartisan “Protect Medical Innovation Act” goes a step further and finally eliminates the medical device tax. When the tax was in effect between 2013 and 2015, 29,000 employees lost their jobs and industry R&D also experienced a $34m reduction in funding when the tax was in force. The American Action Forum predicts that 25,000 more jobs would be lost by 2021 if the tax is reinstated. As part of the AdvaMed DC Fly-In, Georgia Bio and other affiliates spoke on the Hill to garner support to repeal the medical device tax.

What this means to Georgia Bio members

Supporting the medical device tax repeal means employment stability and growth including investments in R&D. The life sciences, including medical device, industry in Georgia employs more than 60,000 and contributes more than $20 billion to the state’s economy (accounting for multiplier effects). This tax would stifle growth and likely prompt job loss.

Ensuring Patient Access to Critical Breakthrough Products

The breakthrough pathway proposal would establish a program of accelerated transitional coverage and payment for new technologies that offer breakthrough in the treatment or diagnosis of serious illnesses affecting Medicare beneficiaries. The Ensuring Patient Access to Critical Breakthrough Products Act of 2019 will be introduced soon and seeks to address the issues. If the product meets the standards it would qualify for an expedited FDA review. If the therapy were eventually approved by the FDA, Centers for Medicare & Medicaid Services (CMS) would provide temporary coverage for three years.

What this means to Georgia Bio members

Making the process easier to get through FDA. This legislation has been in the works for almost two years. We support most measures that accelerate and simplify FDA review processes where appropriate. Once a bill has been introduced, there will be an opportunity for Georgia Bio and our member organizations to act. Stay tuned.

Policy Proposal to Advance Value-Based Health Care

It is widely recognized that the U.S. health care system must transition from a fee-for-service/fee-for-product payment framework to a value-based paradigm to achieve better clinical outcomes, lower costs and improve the patient experience. Value-based Arrangements (VBA’s) condition or modify payment based upon the results achieved. To promote medtech companies entry into value-based health care arrangements, AdvaMed recommends creating VBHC-specific safe harbors for: pricing arrangements, warranty, and risk-sharing arrangements.

What this means to GaBio members

While not unique to Georgia, life science companies and innovators need to be aware that if your solutions do not address a real unmet need, while improving outcomes without increasing or better reducing cost, you will likely find significant headwinds in adoption and sales in the coming years.

If you would like to know more about Georgia Bio’s state advocacy and policy work, contact Joseph Santoro at jsantoro@gabio.org.

You can find our 2019 state policy priorities here.

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