Rep. Erik Paulsen vows to revamp FDA and cut medical device tax

Rep. Erik Paulsen
Rep. Erik Paulsen

Minnesota’s 3rd District congressman, Erik Paulsen, who co-chairs the congressional Med Tech caucus, has an ambitious legislative agenda that would have a big impact on the industry.

He said he is pushing for legislation to:

• “Modernize” the Food and Drug Administration.

• Block implementation of a $20 billion tax on medical devices.

• And make the corporate research and development tax credit permanent.

Paulsen, who sits on the tax-writing House Ways and Means Committee, laid out his agenda to nearly 400 venture capitalists, entrepreneurs and industry professionals while speaking at the MedTech Investing Conference Thursday in Minneapolis.

He noted a visit last week by Dr. Jeffrey Shuren, who heads the FDA arm that regulates medical devices. Shuren was in Minneapolis last week holding a “town hall” meeting to hear from industry insiders and discuss FDA plans to streamline the device approval process.

Paulsen said that “Dr. Shuren got wind I might be proposing changes at the FDA, so last week he actually contacted my office. At some point, I expect we’re actually going to get together,” he said.

Calling the FDA product approval process “inconsistent, inefficient and unpredictable,” Paulsen said “the fundamental challenge is: How do we change the culture of the FDA to one that is more amenable to getting lifesaving technologies to market without needless delays?”

“The No. 1 risk I hear from venture capitalists and investors … isn’t about market opportunity or product success,” he said. “The risk lies in the regulatory environment … brought on by the FDA.”

The congressman said he has been asked to testify next month about the FDA’s medical device approval process at a hearing of the House Oversight and Government Reform Subcommittee on Health Care. The hearing, originally scheduled for April, was canceled and no new date has been released.

“We’re going to propose legislation that modernizes the FDA so that this industry remains strong,” he said. “Companies don’t mind if [FDA review] is rigorous. They want to make sure it’s relevant.”

Paulsen suggested that among reforms could be streamlining device approval process to emulate Europe, where it is easier for companies to bring a product through trials to market.

He has introduced legislation to repeal the $20 billion tax on medical devices that was included as part of the health care overhaul last year.

“My goal is to prevent the tax” from being implemented, he said. But he told the audience that Congress would have to find $20 billion elsewhere to make up for eliminating the tax. “That’s the biggest hurdle,” he added.

Following up on a request from Council of Economic Advisors Chairman Austan Goolsbee, Paulsen invited the audience to provide “off the record” comments about the impact of the tax on jobs and said he would share the information with the Obama administration.

He said he wants to put the tax “high on the radar for the leadership in Congress and the administration. That’s my bottom-line goal.”

Paulsen also said he is co-sponsor of legislation to make the research and development tax credit permanent.

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Comments (3)

  1. Submitted by Bernice Vetsch on 05/21/2011 - 01:05 am.

    Companies conduct R&D to improve their chances of increasing sales and profits in the future. They do NOT need our tax dollars as an incentive.

    Rushing any medical product to market leaves consumers vulnerable to bad effects that may not be apparent during a too-short period of testing.

  2. Submitted by John Olson on 05/23/2011 - 08:01 am.

    Bernice, if you have a family member has a condition or disease where an experimental device or drug comes along that *might* make a difference for the better, most will want to take that chance.

  3. Submitted by Andy Fleck on 05/27/2011 - 11:31 pm.

    The FDA has been on vacation for too many years while every 2nd world country has surpassed our biomedical technology. It’s time for them to get back to work already!

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