Alex Hendrie

Lawmakers Should Ensure A Part D Benefit Redesign Does Not Disincentivize High Value Medicines

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Posted by Alex Hendrie on Tuesday, October 22nd, 2019, 2:22 PM PERMALINK

There are many areas of the healthcare system that lawmakers are currently striving to reform. (See full letter here.)

One of these areas is redesigning the Medicare Part D drug program with a number of systemic changes, including helping seniors better manage their out of pocket costs. 

Several months ago, the Senate Finance Committee advanced legislation – the Prescription Drug Reduction Act of 2019 – which among other things, included a proposal to redesign the Medicare Part D benefit.  The redesign, among other things, eliminates the current coverage gap, caps out of pocket costs for seniors at $3,100 and concerningly, places a new government liability on a select group of manufacturers. 

Efforts to reform Part D should be welcomed, however any reform should be done in a way that does not create winners and losers in the marketplace by disincentivizing high value, innovative medicines for seniors as the Finance Committee package risks doing with its redesign.

The Medicare Part D program has been successful due to its original design that relies on market forces. Part D is successful because it facilitates negotiation between different stakeholders. The system puts downward pressure on costs through competition between pharmacy benefit managers (PBMs), pharmaceutical manufacturers, plans, and pharmacies.

At the core of this program is the non-interference clause which prevents the Secretary of Health and Human Services (HHS) from interfering with these robust private-sector negotiations.

While this system is successful in maintaining low overall program costs, there is room to improve so the program remains competitive for innovation and manageable for seniors and their out of pocket expenses.

However, the existing Part D benefit structure is needlessly complex for seniors, manufacturers, payers and taxpayers, and creates distortions in the market place.

Under the existing system, seniors are required to pay a deductible up to $415. Once this amount is reached, a senior enters the initial coverage gap where they are required to pay 25% of costs throughout the initial coverage threshold. The plan is required to cover the remaining 75% so the senior’s maximum out of pocket cost up to this point is $1,266.25 ($415 + 25% of the initial coverage period).

Once the initial coverage threshold is exceeded, a senior enters the donut hole coverage gap.

Within the donut hole, consumers have been forced to pay out-of-pocket costs far exceeding other coverage thresholds.

       

In 2019, this coverage gap was hit at $8,139.54 in total spending and $5,100 in out-of-pocket costs. Past this threshold, seniors are required to pay 5% of the drug’s list price, the plan pays 15% and Medicare pays for 80%.

As noted by AEI, once a patient reaches the catastrophic phase of the design, there is limited liability for plans which can result in additional and unnecessary out of pocket costs for enrollees.

Figure 1 shows that distortions exist at each level of the current benefit design for patients, manufacturers, payers and taxpayers.

Lawmakers rightly want to improve this system. However, the proposed Senate Finance proposal does not adequately fix the existing distortions.

The Senate Finance bill contains several reforms:

  • This reform creates an out of pocket cap for seniors, which will help lower out of pocket spending for Americans.
     
  • A new catastrophic threshold of $3,100 in out of pocket costs is created, and patients would pay nothing after that cap is reached. 
     
  • To pay for this cap, starting in this catastrophic threshold, a new 20% liability is imposed on manufacturers whose patients enter the catastrophic phase, with the plan paying 60% of costs and Medicare paying 20%.
     
  • The new, 20 percent liability is similar to the 70 percent donut hole liability that is currently present in the benefit design. However, unlike the current donut hole design, this 20 percent liability is imposed on every dollar of new spending.

        

The Senate Finance Committee’s Part D redesign shifts manufacturer liabilities from many to a select and valuable few and does so by creating a new liability that only targets a segment of manufacturers whose patients enter the catastrophic phase.  While the goal of this reform is worthwhile, the policy it takes to get there creates new liabilities to the government and leaves distortions in the benefit and thus the marketplace.

The pay for mechanism for redesign disproportionately falls on manufacturers of high value, innovative drugs, as noted by Avalere, which could harm innovation in some disease areas, including diseases with little or no treatment options for seniors.

While the Senate Finance Committee’s out of pocket cap redesign appears to level the playing field, it does so with a dangerous side effect. As written, it is undeniable the Senate Finance Committee’s new 20 percent liability requirement will directly affect investment patterns present and future for companies that are pursuing high value therapies for Part D populations under the current benefit design.  

In fact, according to Avalere, the new increased liability in some classes of drugs could exceed 500%.

A better solution to reform the Part D benefit would be to reform it in a way that does not punish (and disincentivize) the development of high value treatments.

As lawmakers continue to look for ways to further improve the existing Finance Committee Part D redesign package, they should not overlook its damaging creation of new liabilities placed solely on one group of stakeholders.  A better option would not institute new liability that would greatly disrupt the marketplace which so many innovators have been working under. 

In considering any redesign for Medicare Part D, policy makers should ensure they do as much as possible to reduce distortions in the marketplace and ensure companies continue to compete and develop high value medicines for America’s seniors.

Photo Credit: Flickr


24 States Have Seen Record Low Unemployment Under Trump

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Posted by Alex Hendrie on Monday, October 21st, 2019, 11:30 AM PERMALINK

24 states have seen record low rates of unemployment since Donald Trump became President, according to data released last Friday by the Bureau of Labor Statistics.

The full list of states with record low unemployment rates under Trump includes Alabama, Alaska, Arkansas, California, Colorado, Hawaii, Idaho, Illinois, Iowa, Kentucky, Maine, Mississippi, Missouri, New Jersey, New York, North Dakota, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Washington, and Wisconsin.

Many of these states have seen unemployment rates of 3 percent or lower under President Trump including Wisconsin (2.8 percent), Maine (2.9 percent), Iowa (2.4 percent), and Colorado (2.6 percent).

This low state unemployment should not be surprising – nationwide, the unemployment rate was 3.5 percent in September, a 50 year low.

Since President Trump took office, over 6.4 million jobs have been created and the unemployment rate for Hispanics, African Americans, Asian Americans, and adult women has hit historic lows.

In August, there was over 7 million job openings and over 5.8 million people started a new job.

In addition, the ratio of unemployed persons to job openings is just 0.9 as of August 2019, according to recent Labor Department Job Openings and Labor Turnover Data.

Wages are also growing.

Real median household income has grown by $4,144, or 6.8 percent since the start of the Trump presidency, according to data published in the Wall Street Journal. 

This is the highest real median household income ever and dwarfs wage growth under Barack Obama’s presidency which was around $1,000 as noted by Stephen Moore.

Clearly, the economy is strong for American workers and businesses. However, the Trump administration is not resting on its laurels and continues to push policies that build on this success. For instance: 

  • President Trump recently negotiated a new, U.S.-Japan Trade Agreement with Japanese Prime Minister Shinzo Abe. This agreement will lower barriers to trade and reduce tariffs, increase U.S. exports to Japan, grow the agricultural sector, and promote jobs.

 

  • The administration is making progress on a phase one of a trade agreement with China. The agreement is expected to include a deal for China to buy U.S. agricultural products and a suspension of planned tariffs.

 

  • The administration continues to push Congress to take up the United States-Mexico-Canada trade agreement (USMCA). The USMCA would raise U.S. real GDP by $68.2 billion and create 176,000 American jobs, according to the International Trade Commission. The agreement will increase U.S exports to Canada by $19.1 billion and increase U.S. exports to Mexico by $14.2 billion.
     

List of states with record low unemployment under President Trump 

Source: Bureau of Labor Statistics Data – October 18, 2019 [link]

State

Historic Low Rate

Historic Low Date

Alabama

3 percent

September 2019

Alaska

6.2 percent

September 2019

Arkansas

3.4 percent

August 2019

California

4 percent

September 2019

Colorado

2.6 percent

June 2017

Hawaii

2.2 percent

November 2017

Idaho

2.7 percent

October 2018

Illinois

3.9 percent

September 2019

Iowa

2.4 percent

June 2019

Kentucky

4 percent

May 2019

Maine

2.9 percent

September 2019

Mississippi

4.7 percent

January 2019

Missouri

3 percent

October 2018

New Jersey

3.1 percent

September 2019

New York

3.8 percent

October 2018

North Dakota

2.3 percent

June 2019

Oregon

4 percent

August 2019

Pennsylvania

3.8 percent

June 2019

South Carolina

2.9 percent

September 2019

Tennessee

3.2 percent

April 2019

Texas

3.4 percent

September 2019

Vermont

2.1 percent

August 2019

Washington

4.4 percent

October 2018

Wisconsin

2.8 percent

May 2019

 

Photo Credit: Gage Skidmore


Pelosi Drug Plan Could Impose 95% Tax on Cures for Cancer, Hep-C, MS and More

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Posted by Alex Hendrie on Monday, October 21st, 2019, 10:00 AM PERMALINK

The House Democrat drug pricing plan championed by House Speaker Nancy Pelosi (D-Calif.) could impose a 95 percent tax on hundreds of life-saving and life-preserving drugs including cures for cancer, hepatitis C, epilepsy, and multiple sclerosis.

The legislation (HR 3 - the Lower Drug Costs Now Act) imposes a retroactive, 95 percent excise tax on up to 250 drugs. This tax is imposed on the sales of a drug if the manufacturer does not agree to government-imposed prices. The tax starts at a 65 percent rate, increasing by 10 percent every quarter a manufacturer is out of “compliance.”

Under the Pelosi drug plan, 250 medicines including 125 of the top Medicare Part D drugs (by total spending) are eligible to be selected by the HHS Secretary, meaning they could face the 95 percent tax. 

Based on research by Americans for Affordable Prescription Drugs, the 95 percent tax could hit the following Part D treatments:

  • Leukemia: 5 drugs to treat leukemia (Imbruvica, Imatinib Meslyate, Gleevac, Sprycel, Tasigna)
     
  • Cancer: 6 drugs to treat other forms of cancer including breast cancer, liver cancer, prostate cancer, and kidney cancer (Ibrance, Imbruvica, Zytiga, Xtandi, Afinitor, Tarceva)
     
  • MS: 7 drugs to treat multiple sclerosis (Copaxone, Tecfidera, Avonex, H.P. Acthar, Ofev, Gilenya, Avonex Pen)
     
  • Schizophrenia: 2 drugs to treat Schizophrenia (Invega Sustenna, Aripiprazole)
     
  • Bipolar: 2 drugs to treat bipolar (Latuda, Aripiprazole)
     
  • Epilepsy: 2 drugs to treat epilepsy (Lyrica, Vimpat)
     
  • Lung disease: 6 drugs to treat lung disease (Advair Diskus, Spiriva, Symbicort, Spiriva Respimat, Anoro Ellipta, Incruse Ellipta)
     
  • High Blood Pressure: 2 drugs to treat high blood pressure (Zetia, Bystolic)
     
  • Diabetes: 19 drugs to treat diabetes (Januvia, Lantus Solostar, Lantus, Novolog Flexpen, Levemir Flextouch, Humalog Kwikpen U-100, Tradjenta, Invokana, Novolog, Trulicity, Janumet, Humalog, Toujeo Solostar, Levemir, Novolog Mix 70-30 Flexpen, Tresiba Flextouch U-200, Jardiance, Humalog Mix 75-25 Kwikpen, Welchol)
     
  • HIV/AIDS: 7 drugs to treat HIV/AIDS (Genvoya, Triumeq, Tivicay, Truvada, Atripia, Prezista, Isentress)
     
  • Hepatitis C: 3 drugs to treat Hepatitis C (Harvoni, Eclupsa, Zepatier)
     
  • High cholesterol: 2 drugs to treat high cholesterol (Crestor, Welchol)
     

If the entire 125 top Part D drugs were selected, it would amount to a $90 billion tax increase on seniors' medicines over ten years based on the above research.

The 95 percent Pelosi tax applies to the entire market, not just Medicare Part D, so the overall tax hike would be far greater. 

Because the Pelosi drug tax would not be deductible from income taxes, the nonpartisan Congressional Budget Office estimates that it could result in a manufacturer being taxed more than their total sales:

“the combination of income taxes and excise taxes on the sales could cause the drug manufacturer to lose money if the drug was sold in the United States.”

As an alternative to paying the tax, the CBO analysis stated that manufacturers could withdraw a drug from the market resulting in no revenue from the Pelosi tax:

“CBO and JCT anticipated that manufacturers would discontinue sales in the United States if the excise tax was levied on a drug, resulting in no revenue in that case.”

The 95 percent tax led over 70 groups and activists to write in opposition to the Pelosi plan.

As they noted, if the Pelosi plan were to become law it would dramatically change the American healthcare system in a way that will harm patients, innovators and providers.

Photo Credit: Gage Skidmore


Study: Medicare for All Requires $32 Trillion in Tax Hikes

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Posted by Alex Hendrie on Wednesday, October 16th, 2019, 2:14 PM PERMALINK

Medicare for All will require $32 trillion in higher taxes over the next decade, according to a report by the Urban Institute and the Commonwealth Fund. 

The study analyzes several healthcare reform options including socialized healthcare. The report describes this plan: 

Single Payer Enhanced: This plan covers all U.S. residents, including undocumented immigrants, and features a broader set of benefits than Single Payer “Lite,” including adult dental, vision, and hearing care as a well as a home- and community-based long-term services and supports benefit. In addition, there are no cost-sharing requirements. There is no private insurance option

The report lists four cost estimates for this reform ranging from $29.031 trillion to $34.884 trillion over a decade:

  • Single-payer enhanced with broad benefits and no cost sharing - $32.015 trillion
  • Single-payer enhanced assuming higher provider payments - $34.884 trillion
  • Single-payer enhanced assuming state maintenance of efforts - $29.031 trillion
  • Single-payer enhanced assuming lower administrative costs - $30.568 trillion
     

As Joe Biden tweeted, this will require significant tax increases on the middle class:

Let’s put this in perspective: if you eliminate every single solitary soldier, tank, satellite, nuclear weapon, eliminate the Pentagon and it would only pay for 4 months of Medicare for All. 4 months.

Where do the other 8 months come from? Your paycheck.

Biden has pointed out before that Medicare for All will require middle class tax increases. On Sept. 23 Biden said: "It’s going to cost a lot of money and she's going to raise people's taxes doing it.”

Despite this, Elizabeth Warren has refused to answer whether Medicare for All will raise taxes on the middle class at least 17 times.

There is no way to come close to paying for Medicare for All without dramatic tax increases on the middle class. The proposal released by Bernie Sanders contains $14 trillion in tax hikes, roughly 40% of the total cost of Medicare for All.

It is also important to note that a significant portion of Sanders’ $14 trillion tax increase relies on eliminating healthcare options for American families ($4.2 trillion) and a 7 percent tax on employers large and small ($3.5 trillion).

Regardless, taxes on “the rich” will not come close to paying for Medicare for All.

For instance, a “wealth tax,” a financial transactions tax, a 10 percent surtax on “the wealthy,” a 70 percent top rate, and doubling the tax rate on capital gains would pay for roughly 20 percent of the cost of Medicare for All according to the best-case scenario estimates by the left.

These estimates assume no negative economic feedback, no changes in behavior, and do not account for any revenue loss from the co-mingling of taxes: 

  • A wealth tax (2% annual tax on $50 million in wealth, 3% annual tax on $1 billion) – a $2.75 trillion tax increase
  • A financial transactions tax (0.1 percent on every transaction) – a $777 billion tax increase
  • A 10 percent surtax on the wealthy ($2.9 mil in income and above) -- an $800 billion tax increase
  • 70 percent top marginal income tax rate – a $353 billion tax increase
  • Doubling tax rates on capital gains -- a $1.5 trillion tax increase
     

 Total: $6.17 trillion (19 percent to 21 percent of the $32 - $36 trillion cost of “Medicare For All.”)

"Elizabeth Warren won’t admit the obvious. She will impose broad-based tax hikes on the middle class,” said Americans for Tax Reform president Grover Norquist.

Photo Credit: GotCredit


Pelosi Drug Pricing Plan Contains 95% Manufacturer Excise Tax

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Posted by Alex Hendrie on Tuesday, October 15th, 2019, 1:00 PM PERMALINK

House Speaker Nancy Pelosi’s drug pricing legislation, HR 3, the “Lower Drug Costs Now Act,” imposes a new excise tax on manufacturers of up to 95 percent of sales for refusing government price setting.

This 95 percent tax is imposed on the sales of a drug. In addition, it can be applied retroactively, and is imposed in addition to income taxes. 

As noted by The Congressional Budget Office, this tax is used by the government to enforce price controls on manufacturers: 

"If manufacturers did not enter into negotiations or agree to prices by specified dates or if they did not meet other conditions, they would be subject to an excise tax of up to 95 percent of the sales of those drugs."

CBO offers no projection on the total revenue score of this tax. They assume that a manufacturer will either comply with government price setting (which will not trigger the tax) or leave the U.S. market entirely (resulting in a zero liability as the tax is on US sales):

“CBO and JCT anticipated that manufacturers would discontinue sales in the United States if the excise tax was levied on a drug, resulting in no revenue in that case.”

So, how does this tax work? 

  • This tax is described in the legislation as a “Drug Manufacturer Excise Tax” under Section 102 of the legislation and is imposed “on the sale by the manufacturer, producer, or importer of any selected drug during a day.”
     
  • This tax applies to between 25 and 250 drugs as selected by the Secretary of the Department of Health and Human Services. Eligible drugs include the 125 most expensive “Covered Part D drugs” under Sec. 1860D–2(e) of the Social Security Act, the 125 most expensive drugs in the US, and approved insulin drugs.
     
  • The tax rate is set at 65 percent for the first 90 days of non-compliance, 75 percent for the 91st to 180th days of non-compliance, 85 percent for the next 181st and 270th days of non-compliance, and 95 percent beginning the 271st day of non-compliance.
     
  • The tax is triggered under the following “non-compliance periods”:
     
    • If a manufacturer is out of compliance with the selected drug publication date – defined as April 15 of a plan year that begins 2 years prior to such year – and refuses to enter into negotiations;
       
    • If a manufacturer does not agree to the government set price – described in the bill as the “maximum set price;”
       
    • If a manufacturer fails to provide information on domestic and foreign sales of their drugs as requested by the HHS;
       
    • If a manufacturer fails to provide a retroactive penalty to Treasury for having higher prices than in six countries (Australia, Canada, France, Germany, Japan, and the United Kingdom). Higher price is calculated as both net average price and volume weighted price;
       
    • If the HHS Secretary asks for renegotiation of the price of a drug and the manufacturer does not comply;
       
  • The HHS Secretary is given the authority to apply the tax to sales outside of this period “in the case of a sale which was timed for the purpose of avoiding the tax.”
     
  • Unlike many other taxes in the code, this tax is not deductible when determining income taxes.
     
  • This tax is problematic for a number of reasons:
    ​​​​​​
    • It is imposed at such a high rate that it will result in income taxes above 100 percent of income even if applied to a portion of a business’s sales.  
       
    • It imposed retroactively, rather than prospectively. Taxes are typically imposed prospectively in order to promote consistency, certainty and fairness. All taxpayers deserve to make decisions based on a reasonable interpretation of the law with the expectation that the future changes to the law will not be applied looking backwards.
       
    • It is imposed on sales, not income. Businesses are typically taxed on their income as it allows them to deduct expenses such as wages and other employee benefits, equipment, and machinery. A tax on sales is imposed irrespective of whether a business made any money. 

 

Photo Credit: Brookings Institution - Flickr


ATR Leads Coalition Opposed to Pelosi's 95% Drug Tax

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Posted by Alex Hendrie on Tuesday, October 15th, 2019, 6:00 AM PERMALINK

ATR today released a coalition letter signed by 71 groups and activists in opposition to the Pelosi drug pricing proposal to create a 95 percent tax on pharmaceutical manufacturers.

As noted in the letter, this bill calls for a retroactive tax on sales that is imposed in addition to existing income taxes:

Under Speaker Pelosi’s plan, pharmaceutical manufacturers 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.

The tax is used to enforce price controls on medicines that will crush innovation and distort the existing supply chain as the signers note:

“The alternative to paying this tax is for the companies to submit to strict government price controls on the medicines they produce. While the Pelosi bill claims this is “negotiation,” the plan is more akin to theft.”

This proposal will create significant harm to American innovation to the detriment of jobs, wages, and patients, as the letter notes:

”[The Pelosi] proposal would crush the pharmaceutical industry, deter innovation, and dramatically reduce the ability of patients to access life-saving medicines.

The full letter is found here and is below:

Dear Members of Congress:

We write in opposition to the prescription drug pricing bill offered by House Speaker Nancy Pelosi that would impose an excise tax of up to a 95 percent on hundreds of prescription medicines.

In addition to this new tax, the bill imposes new government price controls that would decimate innovation and distort supply, leading to the same lack of access to the newest and best drugs for patients in other countries that impose these price controls.

Under Speaker Pelosi’s plan, pharmaceutical manufacturers 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.

The alternative to paying this tax is for the companies to submit to strict government price controls on the medicines they produce. While the Pelosi bill claims this is “negotiation,” the plan is more akin to theft.

If this tax hike plan were signed into law, it would cripple the ability of manufacturers to operate and develop new medicines.

It is clear that the Pelosi plan does not represent a good faith attempt to lower drug prices. Rather, it is a proposal that would crush the pharmaceutical industry, deter innovation, and dramatically reduce the ability of patients to access life-saving medicines.

We urge you to oppose the Pelosi plan that would impose price controls and a 95 percent medicine tax on the companies that develop and produce these medicines.

Sincerely,

Grover Norquist
President, Americans For Tax Reform

James L. Martin
Founder/Chairman, 60 Plus Association

Saulius “Saul” Anuzis
President, 60 Plus Association           

Marty Connors
Chair, Alabama Center Right Coalition                      

Bob Carlstrom
President, AMAC Action

Dick Patten
President, American Business Defense Council

Phil Kerpen
President, American Commitment

Daniel Schneider
Executive Director, American Conservative Union

Steve Pociask
President/CEO, The American Consumer Institute Center for Citizen Research

Lisa B. Nelson
CEO, American Legislative Exchange Council

Michael Bowman
Vice President of Policy, ALEC Action

Dee Stewart
President, Americans for a Balanced Budget

Tom Giovanetti
President, Americans for a Strong Economy

Norm Singleton
President, Campaign for Liberty

Ryan Ellis
President, Center for a Free Economy

Andrew F. Quinlan
President, Center for Freedom & Prosperity

Jeffrey Mazzella
President, Center for Individual Freedom

Ginevra Joyce-Myers
Executive Director, Center for Innovation and Free Enterprise

Peter J. Pitts
President, Center for Medicine in the Public Interest

Olivia Grady
Senior Fellow, Center for Worker Freedom

Chuck Muth
President, Citizen Outreach

David McIntosh
President, Club for Growth

Curt Levey
President, The Committee for Justice

Iain Murray
Vice President, Competitive Enterprise Institute

James Edwards
Executive Director, Conservatives for Property Rights

Matthew Kandrach​​​​​​​
President, Consumer Action for a Strong Economy

Fred Cyrus Roeder​​​​​​​
Managing Director, Consumer Choice Center

Tom Schatz ​​​​​​​
President, Council for Citizens Against Government Waste

Katie McAuliffe​​​​​​​
Executive Director, Digital Liberty

Richard Watson
Co-Chair, Florida Center Right Coalition

Adam Brandon
President, Freedomworks​​​​​​​

George Landrith ​​​​​​​
President, Frontiers of Freedom

Grace-Marie Turner
President, Galen Institute

Naomi Lopez
Director of Healthcare Policy, Goldwater Institute

The Honorable Frank Lasee ​​​​​​​
President, The Heartland Institute

Jessica Anderson
Vice President, Heritage Action for America

Rodolfo E. Milani ​​​​​​​
Trustee, Hispanic American Center for Economic Research
Founder, Miami Freedom Forum

Mario H. Lopez
President, Hispanic Leadership Fund

Carrie Lukas
President, Independent Women’s Forum

Heather R. Higgins
CEO, Independent Women’s Voice

Merrill Matthews
Resident Scholar, Institute for Policy Innovation

Chris Ingstad​​​​​​​
President, Iowans for Tax Relief

Sal Nuzzo​​​​​​​
Vice President of Policy, The James Madison Institute

The Honorable Paul R LePage ​​​​​​​
Governor of Maine 2011-2019

Seton Motley
President, Less Government

Doug McCullough
Director, Lone Star Policy Institute

Mary Adams
Chair, Maine Center Right Coalition

The Honorable Bruce Poliquin
Maine Congressman 2nd District, 2015-18

Matthew Gagnon​​​​​​​
CEO, The Maine Heritage Policy Center

Victoria Bucklin ​​​​​​​
President, Maine State Chapter - Parents Involved in Education

Charles Sauer ​​​​​​​
President, Market Institute

Jameson Taylor, Ph.D.
Vice President for Policy, Mississippi Center for Public Policy

The Honorable Tim Jones
Leader, Missouri Center-Right Coalition

Brent Mead
CEO, Montana Policy Institute

Pete Sepp ​​​​​​​
President, National Taxpayers Union

The Honorable Bill O'Brien
The Honorable Stephen Stepanek​​​​​​​
Co-chairs, New Hampshire Center Right Coalition

The Honorable Beth A. O’Connor
Maine House of Representatives

The Honorable Niraj J. Antani​​​​​​​
Ohio State Representative

Douglas Kellogg
Executive Director, Ohioans for Tax Reform

Honorable Jeff Kropf ​​​​​​​
Executive Director, Oregon Capitol Watch Foundation

Daniel Erspamer ​​​​​​​
CEO, Pelican Institute for Public Policy

Lorenzo Montanari​​​​​​​
Executive Director, Property Rights Alliance

Paul Gessing ​​​​​​​
President, Rio Grande Foundation

James L. Setterlund​​​​​​​
Executive Director, Shareholder Advocacy Forum

Karen Kerrigan
President and CEO, Small Business Entrepreneurship Council

David Miller & Brian Shrive
Chairs, Southwest Ohio Center-right Coalition

Tim Andrews
Executive Director, Taxpayers Protection Alliance

Judson Phillips
President, Tea Party Nation

David Balat ​​​​​​​
Director, Right on Healthcare - Texas Public Policy Foundation

Sara Croom ​​​​​​​
President, Trade Alliance to Promote Prosperity

Kevin Fuller
Executive Director, Wyoming Liberty Group

Photo Credit: AFGE - Flickr


Unemployment Rate Hits 50 Year Low

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Posted by Alex Hendrie on Friday, October 4th, 2019, 10:12 AM PERMALINK

The unemployment rate dropped to 3.5 percent and 135,000 jobs were created in September according to the September jobs report released by the Bureau of Labor Statistics. 

This is the lowest unemployment rate since December 1969 – a near 50 year low.

This report shows that the Trump economy remains strong for American workers. In fact, since President Trump took office, over 6.4 million jobs have been created.

The number of jobs created in August was revised up 38,000 from last month’s figure of 130,000 to 168,000. Similarly, the July jobs report was revised up by 7,000 from 159,000 to 166,000.

Moreover, the unemployment rate for Hispanics (3.9 percent), African Americans (5.5 percent), Asian Americans (2.5 percent), and adult women (3.1 percent) is at historic lows.

Wage growth over the past year is at 2.9 percent – a slight decline from previous growth. While this decline is disappointing, wage growth over President Trump’s first term has been strong.

According to a recent Wall Street Journal op-ed, real median household income has grown by $4,144 or 6.8 percent since President Trump took office.

As noted in the op-ed, authored by Stephen Moore, real median household income is at an all-time high:

“Real median household income—the amount earned by those in the very middle—hit $65,084 (in 2019 dollars) for the 12 months ending in July. That’s the highest level ever and a gain of $4,144, or 6.8%, since Mr. Trump took office. By comparison, during 7½ years under President Obama—starting from the end of the recession in June 2009 through January 2017—the median household income rose by only about $1,000.”

Photo Credit: Flickr


Thanks to Trump, Median Household Income at Highest Level Ever

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Posted by Alex Hendrie on Monday, September 30th, 2019, 2:22 PM PERMALINK

Real median household income has grown by $4,144 or 6.8 percent since President Trump took office, according to an op-ed published in the Wall Street Journal.

This data is based on a report released by Sentier Research analyzing the Census Bureau’s monthly Current Population Survey.

As noted in the op-ed, authored by Stephen Moore, real median household income is at an all-time high:

“Real median household income—the amount earned by those in the very middle—hit $65,084 (in 2019 dollars) for the 12 months ending in July. That’s the highest level ever and a gain of $4,144, or 6.8%, since Mr. Trump took office. By comparison, during 7½ years under President Obama—starting from the end of the recession in June 2009 through January 2017—the median household income rose by only about $1,000.”

The below chart highlights the strong Trump wage growth.

                     

This new data is one of many signs the Trump economy remains strong.

  • According to recent Labor Department Job Openings and Labor Turnover Data, the ratio of unemployed persons to job openings is just 0.8 in July of 2019 an all-time low since this data was first collected in 2000.
     
  • Hiring and job openings also remain strong – 6 million people started a job in July and there are 7.2 million openings.
     
  • 3.6 million workers voluntarily quit their jobs In July indicating there is strong confidence in finding other employment.

                       

  • The unemployment rate remains low at 3.7 percent and over 6 million jobs have been created since President Trump took office.
     
  • The unemployment rate for African Americans has hit a record low of 5.5 percent and the Hispanic unemployment rate has matched record lows of 4.2 percent.
     
  • The civilian labor force increased by 571,000 according to the BLS household data, the largest such gain since October 2018 and the fourth consecutive month of labor force growth.


While the economy is strong, the Trump administration is taking further steps to promote economic growth.

The administration recently announced a U.S.-Japan trade agreement that will increase American exports to Japan and lower barriers to trade.

The administration is also pressuring Congress to take up the United States-Mexico-Canada Trade Agreement (USMCA) which will raise real GDP by $68.2 billion and create approximately 176,000 American jobs, according to a report released by the U.S. International Trade Commission.

This stands in stark contrast to Democrats in Congress and on the campaign trail that have proposed trillions of dollars in tax increases that will undo the existing economic growth that has benefited American families and businesses across the country.

 

Photo Credit: Gage Skidmore


ATR Opposes Pelosi Drug Pricing Plan

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Posted by Alex Hendrie on Thursday, September 19th, 2019, 3:57 PM PERMALINK

Today, House Speaker Nancy Pelosi unveiled H.R. 3, the “Lower Prescription Drugs Now Act.” This proposal imposes new government price controls, a 95 percent tax on manufacturers, imports foreign pricing schemes, and imposes a new charge on manufacturers in Medicare. Members of Congress should oppose the Pelosi plan.

 “Pelosi’s drug pricing plan imposes a confiscatory tax in the service of price controls that will end innovation and inevitably lead to a collapse of the healthcare system and put everyone into one sized fits all government monopoly,” said Grover Norquist, President of Americans for Tax Reform.

Pelosi’s bill contains an excise tax on manufacturer sales of between 65 and 95 percent. The proposal allows government bureaucrats to set the prices of the top 250 prescription medicines. If a manufacturer does not agree with this price, refuses to “negotiate” or tries to walk away, they are hit with a 65 percent tax, or “non-compliance fee” on the gross sales of their drug. This tax increases by ten percent every quarter topping out at 95 percent.

Foreign price controls would be imposed on medicines. Under the proposal, no drug in the US can be more than 1.2 times the volume-weighted average price in six countries – Australia, Canada, France, Germany, Japan, and the United Kingdom.

H.R. 3 would also impose retroactive inflationary rebate penalty for all drugs covered under Medicare Part B and Part D. This would require manufacturers to pay the government for any price increase that was greater than inflation since 2016 and for any future price increase. 

Finally, the proposal imposes a 30 percent charge on manufacturers in Medicare. This charge is imposed at the catastrophic phase of the Part D coverage benefit and distorts the insurance program while doing nothing to directly help seniors. It will fall disproportionately on high cost medicines.  

The Pelosi plan is not a good faith effort to negotiate lower prescription drug prices. It will end innovation in the US and prevent the development of the next generation of life-saving and life-preserving medicines.

At present, the U.S. is the world leader in medical innovation with almost 60 percent of drugs being developed in the country. 

This innovation benefits the U.S. in the form of high-paying jobs, a stronger economy R&D, and access to more life-saving medicines.

In fact, of the 290 new medical substances that were launched worldwide between 2011 and 2018, the U.S. had access to 90 percent. By contrast, the United Kingdom had 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent. The socialist style policies used in Europe delay new drugs coming to market by an average of 14 months, according to one study.

American innovation does not come easily – on average, it takes more than a decade to bring a new drug to market. Of all the experimental drugs under development, 90% do not receive approval from the Food and Drug Administration and never come to market. In 2016 alone, American drug companies invested $90 billion for therapy research and development of drugs, more than three times the R&D money spent by the National Institutes of Health.

Rather than promote new innovation and improve the healthcare system, H.R. 3 will serve as a stepping stone to Medicare for All.

By implementing government price controls and taxes, the Pelosi plan will smooth the pathway for a complete takeover of the healthcare system with dramatically higher spending and taxes, and narrower choice and access. This plan will end healthcare for over 150 million Americans and is already supported by a majority of House Democrats and several leading Democrat presidential candidates.

Photo Credit: AFGE


Pelosi Drug Plan Will Destroy U.S. Healthcare System

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Posted by Alex Hendrie on Tuesday, September 10th, 2019, 5:27 PM PERMALINK

According to a leaked draft, House Democrats will propose drug pricing legislation that imposes broad government price controls, imports foreign pricing, and imposes on a new tax on manufacturers.

The draft summary falsely claims that this proposal will facilitate “negotiation” between the government and manufacturers. In reality, manufacturers have little recourse and no ability to walk away under the legislation.

Non-compliance with this faux negotiation would result in an imposition of a 75 percent excise tax. This tax would be calculated as a percentage of a drug’s annual gross sales of the previous year. This scheme would apply to the top 250 drugs. 

In addition to the threat of an excise tax, the proposal contains an international pricing index which would prohibit the “negotiated” price from rising above 1.2 times the volume weighted average price of six countries (Australia, Canada, France, Germany, Japan and the UK). This allows the pricing proposals adopted in foreign countries to be imported into the U.S.

Finally, the legislation calls for an inflationary rebate penalty for Medicare Part D and Part B retroactive to 2016. This would punish manufacturers for past decisions made and would create further distortions in the Medicare system that will harm existing private sector negotiation. 

In sum, these provisions will mean that no actual negotiation will take place. Rather, prices will be set by the government and manufacturers will be forced to submit to the decisions made by bureaucrats.

This proposal is not the way to lower drug prices. Rather than delivering meaningful results for seniors, it represents a government takeover of the system that will ultimately suppress innovation and lead to shortages and higher prices. 

Photo Credit: Ted Eytan


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