The US Senate has passed bipartisan legislation to permanently repeal the 2.3% medical device excise tax.

Originally enacted as a part of the Affordable Care Act (ACA) in 2013, the medical device tax imposes a 2.3% tax on the domestic sales of medical devices, to be paid by the device manufacturer or importer.

Following a two year moratorium, tax went into effect on 1 January 2016 and was then renewed two weeks into 2018.

In July 2018, the US House of Representatives passed a bill to repeal the tax but the Senate failed to act.

The tax was suspended multiple times in the past. The second moratorium is due to expire at the end of this month.

The spending bill will now go to US President Donald John Trump.

The tax has a significant impact on small and mid-sized companies, based on sales and not profits.

The tax affects nearly 300,000 jobs in the MedTech industry of the US, according to the US Department of Commerce.

If implemented again, the tax is estimated to lead to a loss of 21,390 full-time equivalent jobs and a decrease of $1.7bn in the gross domestic product (GDP).

Medical device trade group Advanced Medical Technology Association (AdvaMed) welcomed repealing of the tax.

AdvaMed president and CEO Scott Whitaker said: “The House vote to repeal the device tax is a huge win for American patients.

“Without this burdensome tax, the US MedTech industry, the world leader in medical innovation, can focus now on developing the next generation of treatments and cures for patients in need, and creating good-paying, high-tech jobs in communities across the country.”

In March, US Senators Pat Toomey and Amy Klobuchar introduced bipartisan legislation to repeal medical device tax across the country.