During the current debate on legislation to repeal Obamacare, the Senate may have the opportunity to vote on a provision—introduced by Senator Franken (D-MN)—that would eliminate the ability of companies to deduct advertising and promotional expenses related to prescription drugs. This is a misguided idea and we urge Senators to reject this proposal. Long recognized as a legitimate and necessary business expense, advertising plays a critical role in the competitiveness of manufacturers and the success of their products. Advertising also plays a central role in driving market growth and innovation, which benefits both the manufacturer and the consumer. In doing so, advertising also helps drive prices down by spurring competition. In contrast, disallowing a deduction for direct-to-consumer advertising of prescription drugs increases the costs to pharmaceutical companies by denying a legitimate business expense and also unfairly targets a specific industry for discriminatory tax treatment.
The onerous Health Insurance Tax included in the Affordable Care Act (ACA) was delayed thanks to bipartisan congressional action in 2015, and now new efforts to permanently repeal the anticipated 2018 tax are in the beginning stages.
Today, Reps. Kristi Noem (R-SD) and Kyrsten Sinema (D-AZ) introduced important legislation that repeals section 9010 of the ACA, a provision that levies a $100 billion tax on fully insured health plans—the primary health care option for many small and medium-sized manufacturers. Although officially a tax on health insurance plans, it is a “pass-through,” and the obligation is placed directly on those who are purchasing full-insured health plans.
The NAM has long supported repeal of this tax as it raises the cost of health care and provides an additional burden for employers who are also struggling to manage the overwhelming health care mandates and paperwork demands required by the ACA.
Manufacturers are proud to provide health insurance benefits for their employees, and in fact, 98 percent of manufacturers provide health insurance. Repeal of this tax will offer needed relief for smaller manufacturers who want to maintain a healthy workforce and continue doing right by their employees. However, challenges from the ACA are making it increasingly difficult to do so.
No one understands the frustrations of our health care system quite like manufacturers—rising health care and insurance costs are a top business challenge in our most recent Manufacturers’ Outlook Survey. The “Competing to Win” agenda and health care policy blueprint of the National Association of Manufacturers (NAM) calls on the next Congress and administration to find solutions that will successfully eliminate the costliest and most problematic aspects of the ACA. The NAM appreciates the leadership of Reps. Noem and Sinema and urges Congress not only to consider this important legislation but also include it in the upcoming budget reconciliation package, along with a repeal of the “Cadillac” and medical device taxes.
After the economy and jobs, Americans rate health care as their top public policy concern. And the majority of Americans (54 percent) disapprove of the Affordable Care Act (ACA), according to the Pew Research Center.
No one understands the frustrations of our health care system quite like manufacturers. In the National Association of Manufacturers’ most recent Manufacturers’ Outlook Survey, rising health care and insurance costs ranked as a top business challenge among NAM members (74.8 percent), slightly ahead of an unfavorable business climate (73.6 percent). There are a host of factors that lead to this frustration, and many feel trapped in a problem that is of the government’s making.
Americans deserve better than this. We are a nation that prides itself on first-class, best-in-the-world medical care. Our institutions, public and private, continue to lead the world on patient care, lifesaving treatments and medical research. But we have to keep working to control or lower the cost of coverage through reasonable approaches.
So manufacturers, through our “Competing to Win” agenda and health care policy blueprint, are calling on the next Congress and administration to find solutions that will successfully eliminate the costliest and most problematic aspects of the ACA:
- The 40 percent tax on employee benefits and other mandated taxes
- Onerous administrative requirements
- Upward pressure on medical liability costs
Manufacturers also believe reform should have some key goals:
- Encourage flexibility and data sharing
- Allow for new innovations in coverage options rather than locking in one model
- Provide consumers more information to make better choices
Manufacturers recognize that providing health care coverage is a necessity to remain competitive in attracting talent and maintaining a healthy, stable workforce. It’s what is right for employees.
Ninety-eight percent of manufacturers offer health insurance to employees, and when asked about how they might react to increasing costs for offering health care in an NAM survey of members, only 1.6 percent planned to stop providing coverage.
Without action from our leaders, manufacturers have innovated with their own solutions to improve health care:
- Opting for new plans and payment arrangements
- Bringing medical care, pharmacy services and wellness programs on-site or near-site
- Focusing on addressing chronic conditions, such as diabetes, heart disease, obesity and asthma
If President-elect Donald Trump and the next Congress follow manufacturers’ lead, our people and our economy will be healthier for it.
This blog is part of the NAM’s “12 Days of Transition” series, an effort to provide the presidential transition team and other Washington policymakers with a roadmap to bolster manufacturing in the United States. Read the other blogs in the series here.
If you’re following debates in the Senate, you may have heard Sen. Elizabeth Warren (D-MA) and others refer to one important piece of pending legislation, the 21st Century Cures Act, as “corrupt” and “dangerous.”
Well, she certainly got my attention. But what is really alarming is that Sen. Warren’s attack is baseless. In fact, the effort to derail the 21st Century Cures Act is what is really dangerous—and alarming.
Manufacturers of medical devices and pharmaceuticals save lives and improve the human condition. Their breakthroughs in scientific advances and technological innovations create jobs for scientists and researchers as well as machinists and those on the manufacturing line.
Their work is essential to both the health of our families and our economy.
Unfortunately, due to an outdated federal device and drug approval process, manufacturers in the United States face burdensome costs and unnecessary delays in the development of innovative, lifesaving products.
The 21st Century Cures legislation works to address these challenges. It will modernize our approach to the discovery, development and delivery of medical innovations to ensure that the United States maintains its rightful position of leadership in the global economy at a time when foreign competitors are catching up.
This bill, which represents a bipartisan negotiation in the House and Senate, has been significantly debated over the past two years. The act focuses on important investments in basic research that will lead to further advancement in the development of treatments and products, help fight diseases and other chronic conditions and allow for small business flexibility to provide health care options to employees.
In addition, the legislation also includes a fix to the Affordable Care Act that will allow small businesses to use Health Reimbursement Arrangements to provide health care options for their employees, a practice that is currently heavily fined by the IRS.
Attempts to call this effort “corrupt” and “dangerous” are baseless and more about making points based on political rhetoric, completely ignoring the positive and much needed provisions of the legislation.
Too much progress is at stake. Americans should hold Sen. Warren accountable for attempting to hold up these much needed medical advances—all to score political points.
A highly flawed report that employs the mantle of global health to take aim at innovation and manufacturing was released today by a U.N. panel, representing a real missed opportunity to focus the world on collaborative and effective solutions that could make a substantial difference for real people facing access barriers. Read More
The thesis is more of the same from President Obama and his administration: A public option and continued federal interference in health care markets will strengthen and improve the legacy of the Affordable Care Act (ACA).
The president’s recent submission to the Journal of the American Medical Association (JAMA) is a personal policy defense of his hallmark health care initiative before the medical community. The president even took the opportunity to go beyond ACA and attacked pharmaceutical manufacturers to relinquish hard-earned intellectual property in the name of pricing transparency, a flawed policy approach that will fail to lower prescription drug prices and only stifle medical innovation and future discovery.
Unfortunately, many of the president’s arguments in the special JAMA article fail to recognize the negative impacts of the law on the already-insured and the employer community, which robustly provides health insurance for nearly half of the nation’s population.
Ninety-eight percent of manufacturers offer health insurance to employees and anxieties continue concerning the possible implementation of the employee benefits tax—a 40 percent surcharge paid by employers on benefits that exceed a certain cost for a family or individual. Furthermore, manufacturers continue to report significant concerns with rising health care costs.
While Congress has granted a delay of the so-called “Cadillac” tax until 2020, the president defended the tax as an incentive to improve private-sector health plans. For employers, the continued uncertainty surrounding the ACA and new bureaucratic entanglements set in motion six years ago have created a headache that has yet to subside.
As the election approaches with a new president and new Congress set to take office in 2017, manufacturers will continue to fight senseless red tape that obstructs the ability to offer quality health care. A permanent repeal of the Cadillac tax and the punitive medical device tax are top priorities post-November, as both provisions of the ACA have come to represent balance transfers from productive profit centers to a Rube Goldberg machine that is our health care system. Manufacturers will continue to lead by providing health benefits to employees and will support efforts that make it easier, not harder, to provide these important benefits.
Yesterday, Robyn Boerstling, vice president of infrastructure, innovation and human resources policy for the National Association of Manufacturers, recently sat down with RealClearHealth’s Karl Eisenhower to talk about key health care issues facing manufacturers. In a two-part video series, this clips highlights manufacturers’ concerns about the “Cadillac” tax, rising health care costs and how the Affordable Care Act impacts manufacturers.
To learn more, check out the interview on RealClearPolitics.
Manufacturers in the United States perform more than three-quarters of all private-sector research and development (R&D) in the nation, driving more innovation than any other sector. If you aren’t on the cutting edge of innovation, then you aren’t competitive in the United States and definitely not in the global marketplace. For manufacturers in Colorado and across the United States, their intellectual property and trade secrets are the keys to maintaining innovation and success.
Innovation has long been the hallmark of U.S. economic growth, yet it is also very risky and expensive. Without stringent protections in place to protect a manufacturer’s proprietary business information, the effort wouldn’t be worth the reward. Unfortunately, Colorado and a handful of other states are considering misguided legislation that would target some manufacturers to disclose that confidential information. The legislation is disguised as an attempt to increase transparency but instead is a government intervention designed to initiate an unprecedented view of some manufacturers’ proprietary operations. Read More
On Saturday, a letter to the editor from National Association of Manufacturers (NAM) Vice President of Government Relations Joe Trauger ran in The Washington Post highlighting manufacturers’ concerns with the employee benefits tax, commonly called the “Cadillac tax.” This 40 percent tax on employee benefits is a major issue for manufacturers as rising health care costs remain a top concern.
“The recent ‘Cadillac tax’ editorial missed the mark regarding the so-called virtues of the Affordable Care Act’s tax on employee benefits. To suggest that doing away with on-site clinics, flexible spending accounts and other benefits is good policy and will reduce health-care spending is misguided. Manufacturers have identified health-care expenditures as one of their top business challenges. The ACA has done nothing to mitigate those concerns. Most manufacturers will tell you that coverage is more expensive as a result of the law.”
Last week, the NAM released a new study looking at this costly tax. NAM’s SVP of Communications Erin Streeter and SVP of Policy and Government Affairs Aric Newhouse discussed the impacts of the tax in our ShopTalk video series and the action congress is debating to provide relief. As soon as this week, Congress could once again be voting on a delay of this costly tax.
Over the past several weeks, I’ve been writing about measures in several states that are looking to impose greater reporting burdens on one particular segment of the manufacturing sector in the name of greater transparency. One provision of the so-called transparency measures being debated in several state houses around the country would require manufacturers of medicines to report the prices they charge in other countries for their products. While on the surface this may seem like a useful exercise, in reality, it is completely irrelevant to consumers. The price of medicine in one country or another should have no more bearing on what the price should be in the United States than a similar comparison of the price of ball bearings in Bangladesh or Boston. The point is, they are completely different markets, and countries often differ dramatically in their approach to the delivery of health care to the degree that any comparison is meaningless.