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Letter to IRS Regarding Medical Device Excise Tax – 8/20/12

August 20, 2012

Natalie Payne
Stephanie Bland
CC:PA:LPD:PR (REG-113770-10)
Room 5203
Internal Revenue Service
PO Box 7604
Ben Franklin Station
Washington, DC 20044

Dear Ms. Payne and Ms. Bland:

On behalf of AABB, I am writing in support of comments submitted by America's Blood Centers on May 7 and May 25, 2012, regarding the Treasury/Internal Revenue Service Notice of Proposed Rulemaking concerning the medical device excise tax.

AABB (formerly known as the American Association of Blood Banks) is a not-for-profit professional and standard-setting organization dedicated to advancing transfusion medicine and cellular therapies. Our membership is comprised of approximately 1,800 institutions (including virtually every blood center in the United States) and 8,000 individuals involved in all aspects of blood and stem cell collection, processing, transfusion and transplantation.

AABB has significant concerns the device tax, if inappropriately interpreted to include many products used in the collection and processing of blood, would subject blood centers to burdensome costs and hinder their ability to dedicate resources to improving blood safety and availability. In particular, AABB requests that Treasury/IRS take steps in support of the following requests detailed in ABC's comments:

  • Specify that all products licensed by the Center for Biologics Evaluation and Research (CBER) are not to be treated as medical devices, and therefore not subject to the excise tax.
  • Exclude from the tax combination products and kits when a majority of the cost of such a product is attributable to products not considered medical devices or impose a tax only on the portion that is by definition a medical device. This issue is particularly important to blood centers, which purchase blood collection kits (including sterile containers, integral tubing and anticoagulants), apheresis kits and reagent kits used to detect infectious diseases or determine blood types.
  • Clarify that certain medical devices used by the blood banking community are not taxable since they are not "intended for humans." Devices used to manufacture blood products more closely resemble products used to produce and manufacture drugs and biologics, not medical devices related to patient care.

Thank you for your consideration of these comments. If you have any questions, please contact AABB director of public policy, Theresa Wiegmann, JD at 301-215-6554 or Theresa_L@aabb.org.

Sincerely,

Karen L. Shoos, JD
Chief Executive Officer