Hillary’s Drug "Affordability" Plan Will Put Medical Innovation In a Tail Spin Toward Collapse

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Posted by Alexander Hendrie on Friday, October 2nd, 2015, 1:54 PM PERMALINK

On announcing her drug “affordability” plan last week, Presidential Candidate Hillary Clinton unveiled a series of recycled proposals that would make the problem worse. The plan imposes new price controls that would squeeze medical innovators while also imposing rigid mandates over R&D spending.

Clinton’s plan is clearly appealing to the outrage over Turing Pharmaceuticals -- which last week attempted to increase the cost of drug Daraprim 4,000 percent -- as proof that the industry does not work in the interests of the American people.

In fact, a five page document outlining the plan released by the Clinton campaign mentions Turing Pharmaceuticals 11 times, and its rogue CEO four times. Earlier this week, the Clinton campaign ran an ad entirely about the company and its CEO.

But this one rogue actor is not the norm – the company and its CEO has been denounced by the rest of the industry, who agree that the 4,000 percent price rise is excessive. In response to this outrageous story, Hillary has clearly responded by releasing an equally outrageous and unserious plan.

Evoking the negative connotations behind Turing, Hillary promises to force companies (like Turing) to “invest more of their revenues or pay rebates to support research rather than keep them as profits.”

Drug companies already reinvest in new innovations en masse, but are bound by prohibitively high R&D costs. On average it costs $2.6 billion to develop a new prescription drug. So for this new mandate to work, companies would need to start receiving far higher revenues.

The Clinton plan would result in the opposite happening. At the same time as Hillary is forcing companies to invest more, the Clinton plan squeezes drug companies by implementing price controls and allowing the importation of drugs from other countries.

While this second proposal may sound pro-free market, it would only squeeze American innovators further. Many countries utilize a price control that in the short term results in lower costs for consumers, but also prevents new research for the next miracle cure. While allowing cheaper drugs would lower costs on the surface, it creates a hidden cost that prevents companies from reinvesting in new medicines.

The plan also contains a number of other proposals designed to punish the pharmaceutical industry, like preventing drug companies from treating advertising as a business expense, and shortening the patent life on medicines – meaning companies have an even narrower window to recoup costs from their innovation.

In all, Clinton’s proposal seems more motivated out of spite toward drug companies and faux outrage than a desire for serious reform. Underscoring this, her campaign website vows to “demand lower drug costs.”

Hillary’s plan sets a dangerous “government knows best” precedent. It would prevent medical innovators from recouping the necessary profits to re-invest in new medicines, would force them to do so anyway.  This plan would put innovators between a rock and a hard place, and would almost certainly put the industry in a tail spin toward collapse.


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Karen Murphy, https://www.flickr.com/photos/14372925@N02/

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The Grover Norquist Show: Pope Francis, The Media, and Free Market Economics

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Posted by Edwin Portugal on Thursday, October 1st, 2015, 2:36 PM PERMALINK

In episode 36 of the Grover Norquist Show, ATR president Grover Norquist discusses Pope Francis's visit to America with Catholic activist Deal Hudson. Grover and Deal discuss how the media has distorted the economic message of Pope Francis to fit their political agenda. The media put a spin on Pope Francis' message to make him seem like an anti-capitalist crusader. This could not be farther from the truth; the Catholic Church strongly supports the benefits of the free market. This stance is laid out Pope John Paul II's 1994 encyclical, Centesimus annus. In essence, free market capitalism greatly serves the common good when pursued with virtue. While the Pope's words are his own interpretation of the Bible's teachings, it is important to defer to official Church doctrine.

To read more about the Catholic Church's stance on the free market, click here

To listen to the podcast, click here or listen below.

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Speaker John Boehner

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Judiciary Committee Reaches Agreement on Prison Reform

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Posted by Jorge Marin on Thursday, October 1st, 2015, 1:32 PM PERMALINK

Flanked by members of the Senate Judiciary Committee, Senator Chuck Grassley (R-Iowa) announced sweeping new legislation to reform the nation’s criminal justice system. The Sentencing Reform and Corrections Act would address America’s unsustainable prison population and the harm caused by an ineffective correctional system—though the changes in question come short of a final fix, they are an important step towards a justice system that saves taxpayer dollars and keep our communities safe.

The proposed legislation is the result of months of negotiation between the members of the judiciary committee. Many of the provisions, such as recidivism reduction and rehabilitation, have been successfully applied in conservative states like Texas and Georgia. Congressional lawmakers should be applauded for their efforts to replicate proven success at the federal level.

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Gage Skidmore https://www.flickr.com/photos/gageskidmore/

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Lifting Crude Export Ban would reduce Deficit over a Billion

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Posted by Edwin Portugal on Thursday, October 1st, 2015, 1:09 PM PERMALINK

Momentum has been building over the last month in Congress to overturn the outdated crude oil export ban. The house is now poised to vote on overturning the ban soon - as early as next week - and a new government report released this week confirms that doing so would not just be a boon for the U.S. economy but would reduce the national deficit by over a billion.

The crude oil ban is a measure from the 1970s that was originally intended to protect U.S. oil supplies during a time of scarcity after the 1973 OPEC oil embargo. However, the U.S. is no longer a nation of energy scarcity; rather, the U.S. is now enjoying an energy renaissance. It is increasingly evident the ban is no longer justified and is a burden to the nation’s economic prosperity. 

According to a cost estimate released this week from the Congressional Budget Office (CBO), overturning the ban would reduce the deficit by more than $1.4 billion over 10 years. The CBO projects that lifting the ban would in turn increase production under federal leases.

These funds would come from expanded royalties derived from leases granted to companies to explore for oil on federal land. This figure only accounts for federal revenues; the federal government only receives half of the receipts from these royalties. The other half of the royalties go to state governments, accounting for another 1.4 billion in revenue for states, like Texas, North Dakota, and Oklahoma.

In addition to the CBO report, on September 25th Congressman Fred Upton, chairman of the House Energy and Commerce Committee, submitted a report on H.R. 702 to the House floor. This report highlighted some of the benefits that overturning the ban would have on the deficit and national economy.  

According to the report, overturning the ban would spur economic investment and increase GDP by billions of dollars. In addition, it would create thousands of new jobs, galvanizing hundreds of communities across the country. It would also lower gasoline prices for the American consumer. Lowered fuel prices will save families thousands of dollars per year, effectively raising household incomes.

Overturning the ban would also strengthen national security. Exporting crude oil will move the U.S. closer towards energy independence. The U.S. will become less reliant on oil from foreign sources, and exports would also allow U.S. allies in Europe and Asia to diversify their crude oil supply. Allowing U.S. oil exports also would strengthen America’s economic power, furthering our role as an energy power house.

Lifting the crude oil export ban is a much-needed measure to modernize the nation's outdated, draconian energy policies and institute policy that reflects the nation's economic realities. It is imperative that Congress moves further towards taking action.  Overturning the crude oil export ban will usher the U.S. into further economic prosperity and energy security.


Photo credit: Ken Hodge

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James Richard Spriggs

If American oil & gas producers can sell their product abroad when demand in America is low, then they will be able to maintain more capacity which can provide for Americans when demand here is high. But the main reason for allowing exports is that every American has the right to earn a living by selling his product or service to anyone who is willing to buy it, including foreigners.


There is no need to lift the crude oil export ban, because the global oil market is over supplied.

John Wolsky

Please explain how "The U.S. will become less reliant on oil from foreign sources,"

Rep. Tim Murphy Leads Charge Investigating $5.5 Billion in Obamacare Waste

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Posted by Alexander Hendrie on Tuesday, September 29th, 2015, 3:08 PM PERMALINK

Earlier today, Chairman Tim Murphy (R-Pa.) and the House Energy and Commerce Oversight Subcommittee held a hearing examining Obamacare state exchanges. An investigation into this issue is long overdue, and Chairman Murphy and the Oversight Subcommittee should be applauded for their leadership on this issue.

According to GAO, $5.51 billion in federal funds have been spent on the planning and construction of these exchanges, yet very little oversight has been conducted over the use of these funds. Unsurprisingly, it appears that a large percentage of these funds were wasted. In addition, exchanges across the country have encountered numerous operational difficulties since launch including poor user functionality and lack of scale.

Witnesses from six states - California, Connecticut, Hawaii, Massachusetts, Minnesota, and Oregon – attended the hearing. Combined, these states received over $2 billion in funds.

Illustrating the near-limitless freedom that states received and the absence of federal oversight, only one of the six witnesses could say how much was spent on construction per enrollee. That state, Hawaii spent close to $50,000 according to the witness.

Even though this hearing is a good first step, questions remain regarding the federal government's oversight over state exchanges, particularly now that many exchanges are beginning to encounter fatal operational problems and may soon abandon ship to join the federal exchange.

Chairman Murphy best summed up the situation when he concluded “it was not rainbows and unicorns. It was a mess.”

As has been well documented, many of the exchanges that were called to testify have mismanaged the hundreds of millions of dollars they received:

  • Oregon received $305 million in grants but could not produce a workable website months after launch forcing customers to fax a 20 page document to enroll. Since then, the state has come under investigation over allegations the exchange was run by the Governor’s reelection campaign and decisions were made based on political calculations.


  • Massachusetts was required to upgrade their working exchange due to new Obamacare regulations. But $233 million later, the state broke its system, displacing 300,000 individuals on Medicaid and leaving the state with over $1 billion in costs.


  • California was awarded $1.1 billion in grants, but now faces an $80 million budget deficit for fiscal year 2015-2016. Despite often being referenced as a “successful” exchange, the system has been plagued with enrollment and tax-related errors. In some cases, this has prevented consumers from receiving healthcare for months.


  • Hawaii received $205 million and constructed a workable exchange only for state officials to realize they had no way to pay for day-to-day costs. The exchange is now transitioning to the federal system.

Watch the full hearing below:


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Virginia L. Fabritz

This Obama Care is garbage and a waste of good peoples time. 9 times out of 10, this insurance cost close to what regular insurance cost because it covers nothing. Everything has such a huge co-pay, no one can afford to use it. However, to keep from being penalized (example -$500.00) @ tax time and further down the road, you have no choice. I know this because my daughter has it and it cost so much more to actually use it. Now you tell me what is so great about it. It's a joke, and people are getting ripped off blatantly by the government!

Grover Norquist Statement on Carried Interest

Posted by ATR on Tuesday, September 29th, 2015, 11:34 AM PERMALINK

I oppose higher taxes on carried interest capital gains. On principle, capital gains should be taxed as capital gains not at artificially higher rates. In a conversation with a reporter about a world with drastically lower tax rates across the board, my position on carried interest capital gains was taken radically out of context. My point was and is that increasing taxes on carried interest capital gains is a shiny bauble conceived in left-wing academia, is not serious tax policy and is not part of a grown up conversation on tax reform.

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They should be taxed as
ordinary income....it's not like the rich you advocate for actually worked for

Hillary Clinton’s Drug “Affordability” Plan Will Destroy Medical Innovation

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Posted by Alexander Hendrie on Tuesday, September 29th, 2015, 4:00 AM PERMALINK

Last week, Hillary Clinton released her drug affordability plan, vowing to “demand lower drug costs.” Piggybacking off the public outrage from Turing Pharmaceuticals’ proposed 4,000 per cent increase of drug Daraprim, Hillary’s plan included capping out-of-pocket drug costs at $250 per month and permitted the importation of drugs from other countries where price controls are already in place. 

These two proposals would be a disaster for medical innovation and the drug market. In fact, both have been suggested and rejected time and time again in Congress because they are bad healthcare policy and bad for the free market.

In a tweet, Clinton argued “if the medicine you need costs less in Canada, you should be able to buy it from Canada—or any country that meets our safety standards.” On its face, this probably sounds like a reasonable proposal, but it demonstrates a fundamental misunderstanding of the markets, and the importance of protecting innovation.

If Clinton had her way, consumers would not only be importing medicine, but also the price control of the country of origin. In many countries, price controls give supposedly cheap medicine, yet there is a hidden cost of innovation.

Already, the razor-thin profit margins means there is little left over for drug companies to finance new research and development. This is made worse by the prohibitively high R&D costs – it costs innovators an average of $2.6 billion to develop a new prescription drug, in part due to FDA over-regulation.

In a world of Hillary Clinton-style price controls, companies will be squeezed until they have no money left for innovation. If anything, the 4,000 per cent price increase that so outraged Hillary last week will become more common as drug companies look for ways to make enough revenue to re-invest in new innovations.

This plan may well work in a world of free trade utopia with no market-distorting price controls. But in the real world, her proposal is closer to unilateral disarmament.

Clinton’s other proposal – a price control on drug costs – would artificially lower the price of medicine here in the US. But the same problem exists as her other proposal, it distorts prices and prevents the free market from regulating supply and demand. As a result, the next miracle cure may never get discovered.

Clinton often accuses Republican politicians of being stuck in the past. But under her drug “affordability” plan, medical innovation will be forever stuck in the past for future generations.


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Lucas Cobb, https://www.flickr.com/photos/cobblucas/

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John Hoge

ATR should be promoting economic liberty and free trade, not crony capitalism. Citizens of a free country should be able to buy medicine wherever they damn well please. Restricting that liberry to advance a corporate agenda is wrong.

Crushing the free market grants tremendous power to drug monopolies, allowing them to set arbitrarily high prices. This monopoly pricing power is frighteningly similar to the government's power to tax. And we all know that ATR Is anti tax. So why the inconsistency?

Puerto Rico Should Adopt Enterprise Zones, Not Austerity Tax Hikes

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Posted by Ryan Ellis on Monday, September 28th, 2015, 6:25 PM PERMALINK

Puerto Rico is on the verge of a debt-driven collapse in many of its basic governmental structures. This problem is made worse by the fact that Puerto Rican municipalities, unlike mainland cities and counties, have no ability to restructure using federal bankruptcy law.

But Puerto Rico's problems go even deeper. If these issues are to be avoided in the future, the island must transform from a black hole of capital to a magnet for capital.

Some think the solution lies in tax increases. That would be like giving poison to a dying man.

The best way to fix what ails San Juan is to turn the entire island of Puerto Rico into an enterprise zone.

Initially conceived by the late, great Jack Kemp, enterprise zones are pockets of pro-growth nirvana (especially on tax policy) strategically placed inside economic disaster areas.

What might some elements of a Puerto Rican enterprise zone look like?

Business tax rates. The United States has the highest business tax rates in the developed world (35 percent for corporations, and as high as 43.4 percent for unincorporated firms). There's no reason this shouldn't be 15 percent or even lower in Puerto Rico.

Personal tax rates. You can't have Puerto Rican businesses without Puerto Rican jobs. So the best workers should be attracted to the island by a low tax rate on wages (15 percent or less), a FICA tax holiday, or both.

Capital gains. We want to encourage capital into Puerto Rico, and that means investing in start up ventures and other ownership ventures. To encourage this, Puerto Rico should be a capital gains tax free zone. Even more to the point, there should be no "death tax" in Puerto Rico.

Business fixed investment. Capital investment in Puerto Rico also means buying the hard assets which become the capital stock a growing economy needs. That's why Puerto Rico ought to benefit from 100 percent full business expensing for all the computers, machinery, and buildings investors want to deploy. This would move Puerto Rico away from the slow-deduction "depreciation" regime it labors under today.

If this enterprise zone concept, or anything close to it, was put into place, Puerto Rico would become THE place to do business in America.

It may be in the Caribbean, but it would sure start to look and feel a lot like Hong Kong.


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Frank Worley

Puerto Rico needs to cut spending before it does anything else. The short, medium and long term problems all revolve around a government that employs far too many people and (as expected) accomplishes little. Once government has been reduced by about 30%, then reduce regulations and start investing in new business.


If the question is how to recover from too much government then the answer is always cutting spending.

The Grover Norquist Show: Donald Trump’s Tax Plan: Pro-Growth and Pro-Simplification

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Posted by Matthew Benzmiller on Monday, September 28th, 2015, 5:27 PM PERMALINK

Grover Norquist analyses Donald Trump’s newly unveiled tax plan. Trump gives Americans a deal they can’t refuse, almost. With what Grover calls “Ronald Reagan” style growth, the Donald’s plan should give the United States 4 percent a year in economic growth. Trump’s plan is consistent with the Taxpayer Protection Pledge. The plan details four different tax brackets for individuals, lowering capital gains, lowering business taxes, and repealing taxes that were meant to be repealed several generations ago. Grover says that the plan would make us more competitive for business amidst the global market. Norquist even goes as far to say, “Trump’s plan is dead center of Reagan Republican thinking, when it comes to what would create growth in the United States.” To find out more, tune into the episode 35 of the Grover Norquist show, and don’t forget to email, tweet, or leave a comment for Grover to let him know what you think.

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Gage Skidmore https://www.flickr.com/photos/gageskidmore/

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Where was the growth when Bush cut taxes??? Just big deficits and a great recession. Regan also gave his gift of large deficits. If there are no cuts to government that is what you get with reduced tax revenue through cuts, more debt. If you want a great Nation you have to pay for it, it is not done on the cheap.

My political satire, entitled
"Taking the Tea Party Republican Tax Pledge", is on
YouTube. Here is the link http://www.youtube.com/watch?v...

Gary Causer

I guess you'll just have to see......

Go Trump....and hurry!

Yvonne Hooks Harrell

trump does not propose Health Savings Accounts. He proposes to replace obamacare with another Universal Healthcare that most analysts say would be worse.

Congress Set to Investigate Obamacare Waste, Repeal Burdensome Regulations

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Posted by Alexander Hendrie on Monday, September 28th, 2015, 3:30 PM PERMALINK

After five years of Obamacare, it is clear the law is doing far more harm than good. Of most concern, the law has hiked taxes for Americans families and businesses at least 21 times, including seven that directly hit the middle class. Since the law was passed, billions have been wasted on the construction of barely working healthcare exchanges, premiums and administrative costs have skyrocketed, and confusing regulations have made tax compliance a nightmare.

Fortunately, the Republican controlled Congress is poised to reform to dismantle some of the most damaging provisions of this law, while conducting rigorous oversight over wasted taxpayer dollars.

Earlier today, the House Ways and Means Committee released legislation that would repeal major components of Obamacare through a process known as reconciliation. Specifically, this legislation repeals the employer and individual mandates, the Cadillac tax, and the unnecessary Independent Payment Advisory Board.

Most Obamacare regulations and taxes, like the Cadillac tax have harmed access to affordable healthcare. Even though this tax will not come into effect until 2018, insurers have already begun cutting health benefits in preparation for this onerous law. Some fear that if implemented, the Cadillac tax will cause flexible spending accounts to vanish.

Not only will these reforms be good for taxpayers, they will also be good for the economy. A recent analysis by the Congressional Budget Office and the Joint Committee on Taxation finds that repealing the individual mandate would decrease spending by $311 billion over ten years and reduce the federal deficit by $305 billion over the same window.

The Ways and Means Committee, led by Chairman Paul Ryan (R-Wis.) should be congratulated for taking up this package of reforms.

Others in Congress are taking steps to get to the bottom of the billions that have been wasted during Obamacare’s implementation. Tomorrow, Energy and Commerce Oversight Subcommittee Chairman Tim Murphy (R-Pa.) will hold a hearing examining Obamacare’s state exchanges.

In order to construct these exchanges, the Centers for Medicare and Medicaid Services awarded over $5.5 billion in grants to states, while conducting non-existent levels of oversight. Since then, several state exchanges, including Oregon’s $305 million exchange, have failed. Others remain on the brink of failure, despite millions in federal funds.

An investigation into this waste is long overdue, and Chairman Murphy should be congratulated for taking the lead on getting to the bottom of this egregious waste of taxpayer dollars.

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