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.