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House Bill = Big Win for the Medical Device Lobby

While the House bill comes down much harder on Big Pharma than the Senate, it gives the medical device industry a big break. As The Wall Street Journal points out today, the House bill cuts the $40 billion tax on the device industry that’s in the Senate Finance Committee down to $20 million. And, according to the Journal, “Senate leaders are also preparing to reduce the tax to around that level, according to industry officials and congressional aides.”

The tax reduction is an unequivocal victory for the device industry’s intensive lobbying campaign, which led a legion of prominent Democratic legislators to protest the tax for putting a damper on the industry in their home states. While the Senate had major players like John Kerry and Evan Bayh swinging out against the tax, the House had a lengthy list of Dems from across the country who warned Pelosi and Hoyer about the tax—including key moderates like Blue Dogs Jason Altmire and Zach Spade.

The device industry was reportedly trying to persuade the Democratic leadership to bring the tax down to $15 million, a low-ball offer that was likely rejected. But $20 million tax in the House bill—and the apparent concession on the Senate side—is an industry victory nevertheless. (The move also supports my theory yesterday that Bayh could be backing down from his filibuster threat after he feeling assured that the device tax will be lowered in the final bill.) Paying for the bill is going to be one of the most contentious fights going forward, and the fact that the device industry has managed to lower their contribution to the bill’s financing by half is testament to the clout of its lobbyists.