You are here

CEI Joins Coalition Letter in Opposition to Any Proposal to Impose "Buy American" Mandates on Medicines

Coalition Letters

Title

CEI Joins Coalition Letter in Opposition to Any Proposal to Impose "Buy American" Mandates on Medicines

View Full Document as PDF

Dear Secretary Mnuchin, Director Kudlow, Leader McConnell & Leader McCarthy:

We write in opposition to any proposal to impose “Buy American” mandates on medicines.

A Buy American mandate would place unnecessary sourcing requirements on medicines and medical inputs purchased with federal dollars.

If implemented this proposal will disrupt existing supply chains, invite retaliatory actions from trading partners, and threaten timely access to medicines. During this unprecedented health crisis, a Buy American policy could even threaten our ability to adequately respond to the pandemic.

To be clear – increasing diversity in the supply chain should be encouraged. However, mandating production in America is the wrong way to do this.

The proposal risks upending the complex medical supply chain. This supply chain incorporates numerous inputs from across the world including raw materials, active pharmaceutical ingredients (APIs), and high precision analytical tools.

These supply chains frequently contend with a number of challenges including transportation and logistical obstacles, ensuring supply and demand are met, and alleviate stress caused to the chain due to region-specific disruptions in manufacturing or shortages. The ability of private industry to utilize a diverse global supplier base is essential to creating a healthy competitive advantage and mitigating risk.

Forcibly localizing this supply chain would be a substantial undertaking which would require finding new sourcing in the U.S. If there is no existing alternative, it would be a long process to set up an alternative.

Rather than restoring U.S. jobs, the proposal would likely lead to higher prices and reduced access. While proponents of a Buy American mandate have claimed the proposal is a way to bring back jobs to the U.S., it would almost certainly do more harm than good.

Under a Buy American mandate, some estimates show that the costs of manufacturing could be up to five times higher.

This is not unique to medicines. Buy American policies have increased prices for Americans whenever they have been tried. History shows that they restrict choices for consumers and manufacturers requiring inputs leading to higher prices or lack of access.

It is also important to note that the American pharmaceutical industry already contributes over $100 billion to the U.S. economy every year, directly supporting over 800,000 jobs. When indirect jobs are included, this innovation supports 4 million jobs and $1.1 trillion in total economic impact.

Pharmaceutical jobs are also high paying – the average compensation is over $126,000 – more than double the $60,000 average compensation in the U.S. Instead of destabilizing our innovation ecosystem with price controls, burdensome regulations, and heavy- handed government directives, we need to encourage advanced manufacturing capabilities with less government interference, lower taxes, and other incentives to maintain America’s global leadership in biomedical innovation.

A Buy American mandate could lead to retaliatory actions. Rather than mandating local sourcing requirements in the U.S. that could harm friendly countries and invite retaliatory actions, a better policy would be to seek the abolition of rules and requirements overseas that compel local sourcing to the disadvantage of U.S. manufacturers. Triggering a global reaction would stifle the pharmaceutical supply chain at the very moment where demand for medical innovation is most needed. Instead of warping the supply chain further, this would do more to level the playing field between regions.

We urge you to reject any Buy American policy on medicines. This protectionist proposal has no place in our healthcare system and will upend complex and efficient supply chains, leading to higher prices, threatening access to medicines, and opening the U.S. to retaliatory measures from other countries.

Sincerely,

 

Grover Norquist

President, Americans for Tax Reform

 

Jim Martin

Founder/Chairman 60 Plus Association

 

Saulius “Saul” Anuzis

President, 60 Plus Association

 

Dee Stewart

President, Americans for a Balanced Budget

 

Phil Kerpen

President, American Commitment

 

Steve Pociask

President / CEO, The American Consumer Institute

 

Ryan Ellis

President, Center for a Free Economy

 

Andrew F. Quinlan

President, Center for Freedom and Prosperity

 

Jeff 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

 

Gregory Conko

Senior Fellow, Competitive Enterprise Institute

 

Matthew Kandrach

President, Consumer Action for a Strong Economy

 

Fred Roeder

Health Economist/Managing Director, Consumer Choice Center

 

Yaël Ossowski

Deputy Director, Consumer Choice Center

 

Thomas Schatz

President, Council for Citizens Against Government Waste

 

Hance Haney

Senior Fellow, Discovery Institute

 

Katie McAuliffe

Executive Director, Digital Liberty

 

Adam Brandon

President, FreedomWorks

 

George Landrith

President, Frontiers of Freedom

 

Mario H. Lopez

President, Hispanic Leadership Fund

 

Tom Giovanetti

President, Institute for Policy Innovation

 

Charles Sauer

President, Market Institute

 

Pete Sepp

President, National Taxpayers Union

 

Sally Pipes

President and CEO/Thomas W. Smith Fellow in Health Care Policy

Pacific Research Institute

 

Wayne Winegarden, Ph.D.

Sr. Fellow Business and Economics/Director, Center for Medical Economics and Innovation Pacific Research Institute

 

Lorenzo Montanari

Executive Director, Property Rights Alliance

 

Paul Gessing

President, Rio Grande Foundation

 

Karen Kerrigan

President & CEO, Small Business & Entrepreneurship Council

 

David Williams

President, Taxpayers Protection Alliance

 

Sara Croom

Executive Director, Trade Alliance to Promote Prosperity

 

Amy Noone

Chairman and CEO, United Seniors for America