CEI Joins Coalition Letter Opposing H.R. 3, the Lower Drug Costs Now Act
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Dear Member of Congress:
We urge you to reject efforts to pass H.R. 3, the Lower Drug Costs Now Act. This legislation imposes new taxes and government price controls on American medical innovation. It creates a 95 percent excise tax on manufacturers and imposes an international reference pricing scheme that directly imports foreign price controls into the U.S. This proposal will harm American patients and degrade America’s world-leading role in medical innovation.
Americans have access to several highly effective COVID-19 vaccines because of our cutting-edge medical innovation. Our success in COVID treatments and vaccines should serve as a reminder of why we must protect medical innovation here.
H.R. 3 would impose price controls from socialized medicine systems. Countries like Australia, the United Kingdom, and Canada would be able to dictate the terms of the American marketplace for medicines. Our patients and innovative research and development would pay the price.
H.R. 3 would weaponize the tax code and enact a discriminatory 95 percent excise tax on manufacturers. Under the legislation, pharmaceutical manufacturers that do not agree to foreign price controls would face a retroactive tax of up to 95 percent on the total sales of a drug (not net profits).
This means that a manufacturer selling a medicine for $100 will owe $95 in tax for every product sold with no allowance for the costs incurred. No deductions would be allowed, and it would be imposed on manufacturers in addition to federal and state income taxes they must pay.
This package of foreign price controls with a punitive excise tax on medicines will harm American patients by limiting access to new cures. Countries like Australia, the United Kingdom, and Canada often have to wait years before accessing the same treatments Americans get right away.
According to a study by the Galen Institute, patients in the U.S. had access to nearly 90 percent of new medical substances launched between 2011 and 2018. By contrast, other developed countries had a fraction of these new cures. Patients in the United Kingdom had 60 percent of new substances, Japan had 50 percent, Canada had 44 percent, and Spain had 14 percent. In many cases, Americans are able to buy less expensive generics before countries with socialized medicine can even access the underlying new medicines.
H.R. 3 will threaten high-paying manufacturing jobs across the country at a time when we are just emerging from the economic wreckage from the pandemic. According to a 2017 study by TEConomy Partners, pharmaceutical manufacturers invest $100 billion in the U.S. economy every year, directly supporting 800,000 jobs including jobs in every state. These jobs are high-paying – the average compensation is $126,000 – more than double the average wage in the U.S. When accounting for indirect and induced jobs, medical innovation supports more than four million jobs.
The need for free market policies that promote American medical innovation is clear now more than ever. Thanks to American ingenuity, some of the most effective vaccines in history have been developed to fight the Coronavirus pandemic, at the fastest rates ever. In fact, vaccines developed by Pfizer and Moderna are both over 90 percent effective– a groundbreaking improvement over the typical flu vaccine, for example, which is 40 to 60 percent effective.
Far-left politicians are committed to imposing socialist policies on the entire American healthcare system. Price controls on medicines are just the first step.
We urge you to reject any effort to impose H.R. 3—in part or in full—as a part President Biden’s next spending plan. New taxes and price controls on medical innovation will reduce access to new cures and threaten high-paying manufacturing jobs across the country.
Sincerely,
Grover Norquist
President, Americans for Tax Reform
Saulius “Saul” Anuzis
President, 60 Plus Association
Jim Martin
Founder/Chairman, 60 Plus Association
Marty Connors
Chair, Alabama Center-Right Coalition
Phil Kerpen
President, American Commitment
Brent Wm. Gardner
Chief Government Affairs Officer, Americans for Prosperity
Dee Stewart
President, Americans for a Balanced Budget
Richard Manning
President, Americans for Limited Government
Tom Giovanetti
President, Americans for a Strong Economy
Tom DeWeese
President, American Policy Center
Dick Patten
President, American Business Defense Council
Michael Bowman
President, ALEC Action
Krisztina Pusok, Ph. D.
Director, American Consumer Institute Center for Citizen Research
Bob Carlstrom
President, AMAC Action
John Toedtman
Executive Director, Caesar Rodney Institute
Rabbi Aryeh Spero
President, Caucus for America
Ryan Ellis
President, Center for a Free Economy
Andrew F. Quinlan
President, Center for Freedom and Prosperity
Jeffrey Mazzella
President, Center for Individual Freedom
Ginevra Joyce-Myers
Executive Director, Center for Innovation and Free Enterprise
Peter Pitts
President, Center for Medicine in the Public Interest
Regina Thomson
President, Colorado Issues Coalition
Gregory Conko
Senior Fellow, Competitive Enterprise Institute
Chuck Muth
President, Citizen Outreach
Ashley Baker
Director of Public Policy, The Committee for Justice
Matthew Kandrach
President, Consumer Action for a Strong Economy
Yaël Ossowski
Deputy Director, Consumer Choice Center
James Edwards
Executive Director, Conservatives for Property Rights
Tom Schatz
President, Council for Citizens Against Government Waste
Katie McAuliffe
Executive Director, Digital Liberty
Robert Roper
President, Ethan Allen Institute
Adam Brandon
President, FreedomWorks
George Landrith
President, Frontiers of Freedom
Naomi Lopez
Director of Healthcare Policy, Goldwater Institute
J. Scott Moody
CEO, Granite Institute
Ron Williamson
President, Great Plains Public Policy Institute
Garrett Bess
Vice President, Heritage Action for America
Charles Sauer
President, Market Institute
Heather R. Higgins
CEO, Independent Women’s Voice
Bartlett Cleland
Executive Director, Innovation Economy Institute
Andrew Langer
President, Institute for Liberty
Sal Nuzzo
Vice President of Policy, James Madison Institute
Becki Gray
Senior Vice President, John Locke Foundation (North Carolina)
Seton Motley
President, Less Government
Mary Adams
Chair, Maine Center-Right Coalition
Matthew Gagnon
President, Maine Policy Institute
Christopher B. Summers
President & CEO, Maryland Public Policy Institute
Rodolfo E. Milani
Chairman, Miami Freedom Forum
Gene Clem
Spokesman, Michigan Tea Party Alliance
Tim Jones
Chair, Missouri Center-Right Coalition
Fmr. Speaker, Missouri House of Representatives
Pete Sepp
President, National Taxpayers Union
John Tsarpalas
President, Nevada Policy Research Institute
Stephen Stepanek
Chair, New Hampshire Center-Right Coalition
Douglas Kellogg
Executive Director, Ohioans for Tax Reform
Tom Hebert
Executive Director, Open Competition Center
Sally Pipes*
President and CEO, Pacific Research Institute
Wayne Winegarden*
Director of the Center for Medical Economics and Innovation, Pacific Research Institute
Joshua Crawford
Executive Director, Pegasus Institute
Stone Washington
Member, Project 21
Lorenzo Montanari
Executive Director, Property Rights Alliance
Bette Grande
President & CEO, Roughrider Policy Center
James L. Setterlund
Executive Director, Shareholder Advocacy Forum
Karen Kerrigan
President & CEO, Small Business & Entrepreneurship Council
Kerri Toloczko
Chair, SW FL Center-Right Coalition
David Miller
Chair, SW Ohio Center-Right Coalition
Paul E. Vallely, Major General, US Army (ret)
Chairman, Stand Up America US Foundation
David Williams
President, Taxpayers Protection Alliance
Kent Kaiser
Executive Director, Trade Alliance to Promote Prosperity
C. Preston Noell III
President, Tradition, Family, Property, Inc.
Bill Greener III
President and Principal Spokesperson, United Seniors for America
Casey Given
President, Young Voices
*Individuals listed for identification purposes only.