Second of a series of three excerpts
The Problem: Obamacare’s high taxes on pharmaceutical and medical device companies will deprive firms of capital that they need to be able to invest in new products.
The Solution: Repeal Obamacare’s new taxes.
Why It Will Work: Advances in medical science and technology can yield new ways of treating disease and delivering care that can actually lower overall health care costs. These new taxes will short-circuit that process.
America is the world leader in medical innovation. Whether it’s the newest flu vaccine, the most effective arthritis pain reliever, or the medications that have helped check the HIV/AIDS epidemic, U.S. researchers and firms have led the way. Across the board, Americans survive illnesses longer and recover faster and more safely than anyone, anywhere.
The reason for this is simple: In the United States, people have access to the best, most advanced medical treatments in the world. In fact, this country is the top destination in the world for foreigners in need of advanced health care services. …
Unfortunately, Obamacare threatens to bring American innovation to a screeching halt. To fund their trillion-dollar health care plan, Democrats socked some of their favorite villains — insurers, drug companies and medical device firms — with onerous new taxes.
The impact of these new taxes on health care innovation will be nothing short of disastrous. They will deprive firms of money that they otherwise might spend on research and development. …
Previous medical breakthroughs have eradicated major public health scourges and allowed us to lead healthier and more productive lives. Future cures could do the same — but only if Obamacare’s innovation-killing taxes are repealed.
The Obamacare tax blitz begins with a series of hits on pharmaceutical companies. … In all, drug companies will hand over $16.7 billion in new taxes to Uncle Sam through the end of the decade. That’s on top of their existing tax liabilities. …
Companies that manufacture medical devices such as heart defibrillators, wheelchairs and surgical tools will face a 2.3 percent excise tax. …
Insurers will bear the brunt of Obamacare’s ire. … In all, once projected excise tax revenues are added in, Obamacare will extract nearly $90 billion from insurers over four years.
Of course, companies won’t simply swallow billions of dollars in new taxes, they’ll pass them on to consumers in the form of higher prices. So the Patient Protection and Affordable Care Act will actually make health care less affordable.
During the run-up to Obamacare’s passage, the White House knew it had to convince average Americans that a bill chock-full of new taxes somehow would not actually increase their tax burden.
As far back as September 2008, then-candidate Obama told a crowd in Dover, N.H., that under his health plan “no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
But with the companies that supply our care set to pass the tax hikes they’re facing along to American families, Obamacare will actually break the president’s pledge. … And these taxes on medical innovation will cost much more than money.
Anyone who has benefited from a CT, MRI or PET scan; a new drug therapy; or a high-tech, noninvasive procedure knows the value of medical innovation. …
Discovering new treatments requires substantial investment of both time and money. … It takes approximately $1.3 billion and 10 years to research, develop and bring a new drug to market. …
Unfortunately, Obamacare’s taxes threaten to freeze medical progress and punish the researchers and firms who have delivered them. If those taxes aren’t repealed, the federal government may become a bit richer in the short term — but we’ll all be a lot poorer in the long run. And our lives may not be as long as we had hoped.
Sally Pipes is president and CEO of the Pacific Research Institute. This is excerpted from “The Pipes Plan: The Top Ten Ways to Dismantle and Replace Obamacare” (Regnery).