Results Shed Light on Potential Consequences of Imposing Government Price Controls on Medicare Part D
WASHINGTON, Sept. 27, 2011 /PRNewswire-USNewswire/ -- Thousands of jobs in Michigan supported by the biopharmaceutical research sector would be threatened if harmful policies – such as imposing new taxes in the Medicare prescription drug program – were enacted by federal policymakers.
From research to technical work, manufacturing to construction and other building services, equipment suppliers to child care services, the biopharmaceutical sector supports a broad array of high-quality jobs.
A report by the Battelle Technology Partnership Practice shows that reducing the biopharmaceutical sector's annual revenue by $20 billion would be a serious blow to employment in key regions throughout the country, including in Michigan, where nearly 5,000 jobs would be permanently lost. Overall, the impact would be a potential permanent loss of 260,000 jobs nationwide.
While the Battelle research is not specific to any one policy or event, proposals being considered, such as government-mandated price controls in Part D, would be expected to have an annual revenue impact of this magnitude.
The President and some in Congress have proposed government-mandated price controls in Medicare Part D as part of ongoing budget discussions. Such a policy would have a dramatic negative effect on Michigan's economy and patients, and could undermine the success of the Part D program.
"Biopharmaceutical companies produce the highest-value jobs – the kinds of jobs that can drive future economic growth in Michigan. At a time when the U.S. is facing a jobs crisis, as evidenced by Michigan's 11.2 percent unemployment rate, it is critical that our policymakers embrace dynamic and innovative business sectors such as the biopharmaceutical industry and refrain from stifling job growth through shortsighted proposals," said Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO John J. Castellani.
Beyond jobs, nearly $35 million in state and local taxes would be jeopardized – including over $5 million generated directly by the biopharmaceutical sector, the report shows. In addition, Michigan would lose over $1 billion in total economic output.
Equally important to protecting jobs is protecting the health of Michigan's seniors. Medicare Part D has been an unparalleled success, providing seniors with access to life-saving medicines, generating high satisfaction rates and costing far less than original government projections. Over 45 percent of Michigan's Medicare beneficiaries are enrolled in a Part D plan, according to the Centers for Medicare and Medicaid Services.
"Policies that discourage R&D and cutting-edge science – inevitably slowing the development of needed future medicines – are not fair to seniors waiting for new treatments against our most challenging and costly diseases," Castellani said.
"Our economy is at a critical juncture. We have to create jobs, not lose more. We have to support innovation, not interfere with the most innovative sectors of our economy. We must continue to improve the health of America's seniors, not increase costs and erect barriers to promising scientific breakthroughs," he added.
The research, supported by PhRMA, is available on our website at: http://www.phrma.org/sites/default/files/84/battelle-phrmabiopharmaceuticalsimpacts-usandstatesummary.pdf
The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country's leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $49.4 billion in 2010 in discovering and developing new medicines. Industry-wide research and investment reached a record $67.4 billion in 2010.
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SOURCE Pharmaceutical Research and Manufacturers of America