Nevada’s Drug Pricing Legislation Is Unfunded, Unfounded, and Unaccountable

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People overwhelmingly want lower drug prices—and reasonably so. However, how states and federal leaders go about this undertaking will make all the difference today and into the future. Legislation being considered in Nevada right now, SB 378, is an example of good intentions turning into bad legislation. The bill ignores the basic principles of free enterprise and sets a dangerous precedent that is likely to be challenged in court if enacted. The District of Columbia attempted a rate-setting law over a decade ago and the Federal Circuit affirmed a District Court ruling that declared the law a violation of the Commerce Clause. Further, the Court also affirmed the federal patent framework preempts such legislative actions.

And if Nevada’s elected leaders do follow through on SB 378, price controls would be the wrong decision—even worse would be the proposed special committee of appointed officials with the power to set drug prices. The drug pricing board that this legislation would create would be empowered to set prices for health plans sponsored by state and local governments, state colleges and universities, and the state Medicaid program. Unbelievably, the board would be funded by gifts or voluntary donations. If it sounds like an invitation to corruption, that’s because it is. What is to stop the board and one of the entities it is supposed to regulate—one of the entities that could be funding it under this proposal—from colluding to fix the price of certain medicines? The potential conflicts of interest are limitless.

Moreover, fixing prices is not an effective means to ensure affordable access to medicines for people who need them the most. Nevada should heed lessons of past price control efforts. But moreover, giving power to an unaccountable, unfunded and unelected board is a recipe for unfair play, corruption and actions that are completely contrary to the principles of free enterprise. Just say no to SB 378.

Timmons: Mark Made Us Better in the Way He Lived Life

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May 4, 2019, Washington, D.C. – National Association of Manufacturers (NAM) President and CEO Jay Timmons released the following statement on the passing of Leading Authorities President and CEO Mark French:

“With his unbridled creativity and a relentless entrepreneurial spirit, Mark French made a name for himself as a leader in the association and speaking industries. And with his warmth and generosity, he made friends across this country. I consider myself extraordinarily fortunate to have been counted as one of them.

“Losing Mark is a gut punch. And we send our deepest sympathies to Mark’s wife, Carol, his daughter Lauren, and his son Brian. We’re holding them close, and we take some measure of comfort in knowing that though he has left us, he is now reunited with his daughter Kathleen.

“Mark offered the world so much and had so much left to give. From building Leading Authorities to publishing CEO Update, he dedicated himself to making the association community better and our country stronger. His legacy will be defined in part by the countless leaders who today are better stewards of their organizations and more selfless champions of their causes thanks to Mark’s work.

“Mark made all of us better in the way he lived his life. His resume included everything from founding a successful company to serving on association and hospital boards to notable achievements at national organizations. What he built is impressive, but even more impressive is who he was.

“In what would be his final Facebook post, Mark offered encouraging words for us all: ‘I remain optimistic despite my challenges and I have faith in God. None of us are forever. We must treasure our blessings…. Finally, be optimistic, or at least as optimistic as you can be. Sometimes that can be hard but…optimism will make you a much happier person.’

“It’s hard to be optimistic today. But like so many others, I will do my best to live by my friend’s creed, to be as optimistic as I can be and to treasure the blessing that is having known and learned from the impressive Mark French.”

Manufacturing workers using computer science to analyze data

In Geneva, As In Washington, Private-Sector Engagement Is Critical To Global Solutions

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Geneva is the nerve center for many multilateral organizations. It is home to an array of critical United Nations-related groups such as the World Health Organization, International Labour Organization, World Intellectual Property Organization, and World Trade Organization. These institutions play an important role in tackling many challenges at an international scale, pertaining to areas from global health and innovation to labor rights and advancing important initiatives such as the U.N.’s sustainable development goals.

Real, lasting progress towards these goals depends on broad approaches, innovative thinking, and inclusive strategies. The private sector has long supported a fair, stable, rules-based international system and effective international institutions. The private sector has already been a key partner in many of these efforts and continues to seek to work to collaborate on effective solutions to global challenges. With critical resources and expertise useful to both the development and the implementation of global initiatives, companies and business groups need to be part of the solution. As the complexity of these challenges increases, engagement and partnership between international organizations and the private sector will only grow in importance.

To this end, I am in Geneva this week leading an international business delegation that includes leading global businesses and associations from a variety of industries. We will be meeting with member state representatives from around the world to discuss public-private sector engagement and their missions’ leadership on international issues. We will also be engaging on issue priorities and ways to work more productively with key stakeholders, including international organizations, national governments, and others, towards more sustainable and inclusive efforts to address global issues.

While we will be discussing issues across multiple organizations, a major milestone of interest is the WHO’s upcoming World Health Assembly (WHA) taking place at the end of May. The WHO is an organization that has historically had many successes, notably thanks to proactive, inclusive mission-focused approaches to global health problems. For example, in the fight against polio, the WHO helped launch the Global Polio Eradication Initiative, a strong international public-private partnership whose actions have led to a 99.9 percent decrease in incidences of polio worldwide.

The timing is good, given the WHO’s current focus on reorganization and reform as well as the WHA’s packed agenda. Manufacturers in the United States support the common goal of a more effective, transparent and mission-focused WHO that is responsive to member state leadership and works towards consensus-based approaches to critical health challenges. The WHA agenda will provide another opportunity for the organization to work towards these solutions and to implement direction from its Director-General, Dr. Tedros Adhanom Ghebreyesus, to embrace public-private partnerships and inclusive, two-way dialogue with private sector groups in the development and implementation of public health initiatives.

On public health, as on an array of global challenges, manufacturers need to be at the table with their expertise to work with the WHO, national governments, and other stakeholders to find real solutions to pressing global issues and promote clear leadership in driving a sustainable agenda. Our Geneva mission trip is a key step in engaging those constructive voices that are looking for solutions.


Lead Battery Industry Celebrates Earth Day With its Circular Economy

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As Earth Day celebrations come to a close, we reflect on the growing realization that recycling alone is not the end goal. There’s a shift in the manufacturing sector away from a linear economic model of take-make-use-dispose, to a circular one of make-use-recycle-remanufacture.

In a circular economy, the value of products and materials are maintained for as long as possible, and waste and resource use are minimized. In the lead battery industry, when a battery has reached the end of its first life, its materials are kept within the economy to be used again and again to create further value.  

Others can look to the lead battery industry for a map forward. Lead battery manufacturers and recyclers are among the 16 percent of U.S. firms that have adopted a circular economy framework. This is important as our need for energy storage in the renewable energy, automotive and digital technology sectors grows. In fact, the Global Battery Alliance, under the auspices of the World Economic Forum, has deemed batteries a core technology for enabling the energy and transportation sectors to shift toward decarbonization.

There are many benefits of lead battery circularity, namely:

  • Conserving resources and creating new value. Nearly 100 percent of all lead batteries are recycled, creating a steady stream of materials for making new batteries.
  • Maintaining national security. Recycled materials foster energy independence and contribute to a more reliable secondary supply chain. Approximately 70 percent of the lead in batteries used by U.S. manufacturers is sourced from domestic recycling facilities.
  • Boosting the economy. Lead batteries have been recycled for more than 100 years and model a closed-loop system that decreases cost and increases value. 

In addition, the lead battery industry incorporates a variety of sustainable practices that should be a model of sound sustainability for other industries to follow.

  • Michigan-based Advanced Battery Concepts has developed and patented GreenSeal® technology, which reduces the amount of lead in batteries by 46 percent, making each battery lighter, and saving the average vehicle more than 20 gallons of fuel a year.
  • East Penn Manufacturing in Pennsylvania was the first to invent a patented process to recycle battery acid and today recycles millions of gallons annually for use in new batteries.
  • Georgia-based Exide Technologies is installing groundbreaking solar installations in Portugal. The project is one of the largest self-consumption generation units with storage in Europe. Upon completion, it will generate enough electricity to power the equivalent of more than 2,000 homes.
  • Minnesota-based Gopher Resource has invested nearly $5 million in a storm water collection and re-use distribution system. The system saves nearly 17 million gallons of water annually.

On this Earth Day, we’re proud to recognize that lead batteries, a product that got its start at the beginning of the 20th century, continues to evolve. Through ongoing innovation, lead batteries are the aspirational benchmark for a dynamic circular economy business model and 21st-century sustainability.

U.S. Economy Shows Resilience, Grows 3.2% in First Quarter of 2019

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Despite a multitude of challenges—slowing global growth, the partial government shutdown, trade policy uncertainties, a strong U.S. dollar—the U.S. economy showed its resilience in the first quarter, growing a solid 3.2 percent at the annual rate.

This was the strongest first quarter of growth since 2015. The data were buoyed by robust contributions from service-sector consumption, exports and state and local government spending, with notable drags on growth from durable goods spending and housing. Weaker consumer purchases stemmed largely from sharp declines in motor vehicles and parts activity, among other categories.

Nonetheless, the larger story here remains the strength in the top-line number, which exceeded consensus estimates and was significantly better than what was predicted just a few weeks ago. As such, the U.S. economy should now expand by around 2.7 percent in 2019—an improvement from what I might have forecasted prior to this release. As a reminder, real GDP rose 2.9 percent in 2018, or 3.1 percent from Q4:2017 to Q4:2018. The was the best year-over-year rate since 2005.

In the first quarter figures, goods consumption declined 0.7 percent at the annual rate, weighed down by a whopping 5.3 percent decrease in durable goods spending (see the motor vehicles discussion above) but helped by a 1.7 percent increase for nondurable goods activity. I would expect automotive sales to improve moving forward, which should help boost second quarter growth. At the same time, nonresidential fixed investment rose a modest 2.7 percent, largely on intellectual property spending. Equipment and structures investment was soft, but business spending on inventories added 0.65 percentage points to headline growth.

Meanwhile, goods exports rose an annualized 4.7 percent in the first quarter, with goods imports off 4.4 percent. Therefore, net exports added 1.03 percentage points to real GDP growth, the strongest contribution since the second quarter of 2018.

An Interview with a Maker

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Limor Fried is the founder and owner of Adafruit Industries, a manufacturer of educational electronics and the leading source of educational materials for young makers. She’s also one of the honorees of The Manufacturing Institute’s 2019 STEP Ahead Awards, which recognize accomplished women in manufacturing.

Limor Fried, founder and owner of Adafruit Industries.

Here is a brief interview with Fried for the NAM’s morning newsletter, Input.

Input: How did you come to create Adafruit?

Fried: I’ve always liked to make stuff and work with my hands. I studied engineering at MIT, and as I learned about electronics in class, I’d build projects in my spare time. I made a little MP3 player, a cell phone jammer, even a gaming device like a Game Boy. Then I published these projects online. People around the world would see my blog posts, and they’d email me saying, “Wow, these projects are so cool, I want to make my own MP3 player. Can you sell me a kit of the parts needed?”

Right after I graduated, I started making kits for people. I’d order all the parts and assemble them into a kit pack on my own. That was 13 years ago. Today, we have a facility here in Manhattan, with a pick-and-place line that does all the assembly. I don’t have to cut out parts and put them in bags anymore.

For me, creating a manufacturing company tapped into that same joy of creating that I felt when I was five. I’m just doing things on a bigger scale now.

Input: How has the market for hobbyist and educational materials changed over the past 13 years?

Fried: When I was a kid, doing electronics or assembly with kits was really hard. I wasn’t very successful in building stuff because the kits were difficult to use and the documentation wasn’t very good. Now, thanks to MakeCode from Microsoft and Scratch and CircuitPython and the Circuit Playground Express, it’s so much easier to build stuff. You don’t have to have a computer science background or even a computer at home. You can even program from a mobile phone.

At Adafruit we have almost 2,000 projects and guides available on, which is our public learning system. We provide everything from beginner projects to complicated designs that require 3D printing, soldering, electronics, coding and more.

Input: Do the kids who use your products keep in touch as they grow up?  

Fried: Absolutely. We’ve had kids appear on our show-and-tell program, which we host every Wednesday at 7:30 p.m. It’s been going on for 10 years, so the eight- or nine-year-olds who appeared in the beginning will email us years later to say, “I really loved building these projects as a kid and so I became an engineer.”

The early exposure matters a lot. You get kids into manufacturing at a young age, and they realize that you need the same skills when you’re older, too. As an engineer, you’re just working with bigger schematics and more CAD drawings.

Input: Do any examples of kids’ projects come to mind?

Fried: Not too long ago we had a Girl Scout troop come on the show with their robot. Each one of the girls showed off a different part of the robot from the chassis to the drive train to the central system. They all worked together on this robot, which taught them another essential skill—collaboration. Those girls will be well prepared to go into engineering someday.

Input: On the same subject, when it comes to inspiring more young people to go into manufacturing, is there anything else we should be doing?

Fried: Manufacturers and engineers can make a tremendous difference by mentoring children in their local school or community. The school probably has a robotics, 3D printing or metalworking club that would love to have an experienced adult come in and share his or her knowledge. You can also go to local events, like Maker Faires or state fairs, to show off some of the cool stuff that your company has built. There are many ways to get involved.

Input: How do you respond to young people who say, “I’d like to start my own business just like you did”?

Fried: The best advice I have is to start with a small run. Build something and then share it with people and get their feedback. It’s okay to build the first few products by hand. If your design is popular, then you can look into adding automation. Trying to optimize your automation early on can make things difficult because you end up optimizing the wrong thing. I made my first few kits by hand, as I said. It took longer, but I learned a lot about what to look for in the equipment I purchased later.

Input: What’s on the horizon for you in future? Where would you like Adafruit to go?

Fried: Adafruit is focused on making it easier than ever for anyone to build stuff with electronics. Python is the most popular programming language in the world, used in almost everything—and in almost every sector of manufacturing. We need to introduce kids to a version called CircuitPython, so they can use all the technology that’s out there and be prepared for jobs that require programming.

We’re also excited about assistive technology, which helps people with disabilities use the technology all around us. A lot of people need custom designs to suit their individual needs. We sell off-the-shelf components and electronics that can be used to build those solutions. That way, people who aren’t necessarily engineers by training can get plug-and-play parts, then customize and code everything they need. It’s a form of a small-scale manufacturing.

MasterCraft CEO Joins New SEC Advisory Committee

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This week, the SEC launched a new Small Business Capital Formation Advisory Committee to ensure that emerging companies have a voice in SEC decision-making. One of the founding members of the Advisory Committee, as announced this week, will be Terry McNew, President & CEO of MasterCraft Boat Holdings. MasterCraft is an 882-employee boat manufacturer based in Vonore, Tennessee.

Established pursuant to the SEC Small Business Advocate Act of 2016, the Advisory Committee will work with the SEC’s Advocate for Small Business Capital Formation (a position also created by the Act) to advise the SEC on problems that small businesses have in securing access to capital, identify areas in which small businesses and their investors would benefit from changes to existing rules and regulations, and propose appropriate reforms to the SEC and Congress.

Mr. McNew will bring a strong manufacturing voice to the Advisory Committee, building on his 31 years of experience in the marine manufacturing industry. Prior to joining MasterCraft in 2012, he was the Executive Vice President of Product Development & Engineering, Manufacturing, and Quality for the Brunswick Recreation Boat Group.

The NAM congratulates Mr. McNew on his exciting new role, and manufacturers look forward to the SEC taking steps to incorporate the Advisory Committee’s expertise into future decisions that impact capital formation and job creation at small businesses across the country.

Colorado’s Paid Leave Proposal is Well-Intentioned but Bad for Workers and Business

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Manufacturers know that paid leave is a powerful tool for attracting and retaining talented employees. That is why the National Association of Manufacturers supports paid leave programs created by employers and employees that fit the needs of the workplace—rather than broadly imposed programs that do more to create compliance burdens than provide workers with more generous leave. Manufacturers differ widely in terms of the benefits they can offer their workforce, and one-size-fits-all paid leave mandates are often more harmful than helpful to small businesses seeking cost effective ways to provide better benefits. One bill in Colorado, SB 188, is a perfect example of how a state mandated paid leave program can miss the mark.

Colorado’s legislature is currently debating a proposal that sounds like a paid version of the Federal Family and Medical Leave Act (FMLA)—the federal statute that provides 12 weeks of job-protected, unpaid leave for eligible employees for specified family and medical purposes—but is not. If enacted, it would create extreme new compliance burdens and confusion for Colorado manufacturers. Other states have debated and even adopted legislation that ties paid leave to FMLA—albeit far less than the 12 paid weeks contemplated in Colorado. Those states, however, tied their paid leave funds to pre-existing disability leave or other programs. SB 188, in comparison, creates a brand-new system that not only levies a new tax on employers and employees, but also differs vastly from FMLA requirements in important ways. For example, SB 188 would apply to a business with as few as one to four employees—the size of a majority of manufacturing establishments—when Congress recognized that even providing unpaid leave for such a business through FMLA might be unduly burdensome. SB 188 imposes a financial and practical burden that hits small manufacturers the hardest.

Despite Colorado lawmakers’ good intentions, a blanket mandate that does not fit with existing workplace paid leave policies, that clashes with federal law and that creates heavy financial burdens on workers and small manufacturers is not the answer. Manufacturers already face an increasingly confusing patchwork of state and local workplace regulations. States should focus on eliminating obstacles that stand in the way of employers that want to provide more generous paid leave policies. SB 188, and other bills like it across the country, simply make the problem worse.

How McCormick Is Committing to Sustainability

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At McCormick, we are committed to the long-term vitality of people, communities, and the planet while delivering top-tier financial results. In other words, we’re focused on Purpose-led Performance. This guiding principle marries our commitment to high performance with its responsible and conscious stewardship of the environment. It is an underlying principle of everything we do at McCormick.

In October 2017, we outlined our sustainability goals through 2025 in our Purpose-led Performance report, which are all aimed at working to improve the health and well-being of all people, building resilience in communities around the world, and positively impacting the planet. These goals include sourcing 100 percent of branded iconic ingredients sustainably, improving the livelihoods of 90 percent of smallholder farmers who grow McCormick’s iconic herbs and spices, and championing equality for women and people of color, and they demonstrate McCormick’s commitment to embedding sustainable practices throughout our globally-enabled workstreams.

Putting Packaging in Perspective

We can’t deliver our products to our consumers without safe packaging, and our approach to packaging is an important piece of McCormick’s commitment to sustainability. It plays a crucial role in food safety and ensures consistently high-quality products. That’s why we’ve aligned our sustainability goals as they relate to packaging with the United Nations Sustainable Development Goals (SDGs), and it’s why we’re working with external suppliers to improve processes to reduce packaging waste across our supply chain.

In October 2018, McCormick built on its original goals and announced that 100 percent of the company’s plastic packaging would be reusable, recyclable or able to be repurposed by 2025. The move is part of McCormick’s continuous focus on advancing sustainability and reducing the company’s carbon footprint by working to eliminate single-use plastics, adopting renewable materials, and encouraging composting.

This new commitment strengthened McCormick’s existing 2025 packaging goals, which included reducing the company’s packaging carbon footprint by 25 percent and eliminating BPA and PVC from all primary and secondary packaging materials.

Another example of McCormick’s dedication to green packaging is the reinvention of two of our most iconic products: Black Pepper and Old Bay Seasoning. Until now, the well-known products were sold in metal cans with plastic tops. Moving forward, the products will be sold in a fully recyclable PET container, and this move alone will equate to a 16 percent reduction in associated carbon emissions. These types of smart innovations are why McCormick’s packaging designers and engineers are always searching for new ways to improve packaging and boost sustainability.

New Plastics Economy Global Commitment

Additionally, McCormick recently signed onto The Ellen MacArthur Foundation’s New Plastics Economy Global Commitment, which works to accelerate the transition to a circular economy for plastics. As part of the Global Commitment, McCormick has committed to a series of targets and actions, including:

  • Achieving 100 percent of plastic packaging that can be reused, recycled or repurposed by 2025
  • Further increasing recycled content in plastic packaging
  • Developing packaging design innovations that further reduce the use of plastic materials
  • Adopting renewable packaging materials  

McCormick’s commitment to sustainability is not going unnoticed, either. We were recently ranked as the #1 most sustainable food company in the 2019 Corporate Knights Top 100 Most Sustainable Corporations Index, which was released earlier this year at the World Economic Forum in Davos, Switzerland. We were also recognized as the world’s #22 most sustainable company on the 2019 Barron’s 100 Most Sustainable Companies list, released by Barron’s Magazine.

McCormick is proud to be one of the food industry’s most sustainable companies. We promise to continue delivering the flavors that have been loved for generations, while delivering on our larger plan to not just do well, but to do good.

As Tax Day Arrives, Evidence Shows Tax Reform Is Still Jet Fuel for U.S. Manufacturing Growth

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As millions of Americans face the first tax day filing deadline completely covered under the new tax reform law, U.S. manufacturers are continuing to see sustained growth due to the overhauled tax code nearly a year and a half after its passage. 

Economic data since tax reform was signed into law points to a stunning and quick turnaround. The U.S. economy grew 3.1% from the fourth quarter of 2017, when tax reform was signed into law, to the fourth quarter of 2018, the fastest year-over-year growth in nearly fifteen years. Moreover, business investment spiked 6.9% in 2018, the strongest reading in five years.

The enactment of tax reform, which replaced an outdated system with a more competitive tax code, served as rocket fuel for the U.S. manufacturing industry in particular. U.S. manufacturers created more than a quarter million jobs in 2018, the best year for job creation since 1997, and manufacturing production skyrocketed to the highest level in a decade. A National Association of Manufacturers (NAM) industry-wide survey from April 2018 found that 86% of manufacturers were already planning to increase investments due to the changes and more than two thirds reported plans to increase wages and benefits. 

According to an NAM Outlook survey released in December, last year was the most optimistic year for manufacturers on record. A similar survey from March found the industry has enjoyed nine consecutive quarters of record optimism, largely due to the tax law. 

“Tax reform sparked the robust manufacturing job growth manufacturers predicted,” NAM Chief Economist Chad Moutray said.

Through its “Keeping Our Promise” campaign, the NAM has reported on dozens of stories of small and large manufacturers across America who have raised wages, increased hiring, and invested in new production due to the tax law.

“Tax reform has provided a tremendous boost to the men and women who make things in America,” NAM Vice President of Tax and Domestic Economic Policy Chris Netram said. “Manufacturers are enjoying historic levels of business optimism and have created jobs at the fastest pace in decades.”

However, while tax reform has sparked a surge in U.S. manufacturing, Netram also warned that efforts by politicians in Washington to roll back the law would directly threaten the past year and a half of record growth. 

Indeed, the March 2019 NAM survey found that, when asked about the impact of Congress potentially repealing pro-growth provisions in the tax law, two-thirds of respondents would consider reducing capital investments in the United States, and 54% and 62% said it might force them to have to scale back employment and wages and bonuses, respectively.

“It’s clear that adopting a more competitive tax system has boosted the industry,” Netram said. “It’s also clear that rolling back the benefits of tax reform would make it more difficult to further grow our thriving American manufacturing sector.”