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Senators push to repeal U.S. medical device tax; success unlikely

By Kim Dixon

WASHINGTON (Reuters) - A bipartisan group of U.S. senators introduced legislation on Thursday to repeal a tax on medical devices that is part of President Barack Obama's healthcare law, although the proposal likely faces an uphill climb in Congress.

The tax applies to a range of medical products - everything from bedpans and surgical tools to the expensive heart devices produced in the home states of the senators backing the repeal. It is among several new industry levies in Obama's 2010 healthcare overhaul law, which aims to provide health insurance for millions of Americans who lack it.

The 2.3 percent tax went into effect this year and is projected to raise about $30 billion over a decade to fund extended coverage. Senators from Minnesota, Indiana and Pennsylvania, where many big medical technology companies are based, are among those who have been pushing for a repeal.

"In order to compete in the global economy our medical device businesses need a level playing field," said Democratic Senator Amy Klobuchar of Minnesota, home to Medtronic Inc, one of the biggest medical device makers.

Industry officials and supportive lawmakers say the tax will hurt innovation and job creation.

But the law already is being implemented and was declared constitutional by the U.S. Supreme Court last year. That and the cost of repeal - depriving the federal government of billions at a time of dire fiscal straits - suggest the measure to kill the tax is unlikely to win approval.

(Reporting by Kim Dixon; Editing by Kevin Drawbaugh and Bill Trott)

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