We already know that the radical drug pricing plan unveiled last week by House Speaker Nancy Pelosi is the wrong approach for patients, the U.S. health care system, and American innovation. But what about our economy and jobs?
Across the country, America’s biopharmaceutical sector directly employs more than 800,000 workers. These men and women strive every day to research, develop, manufacture, and deliver innovative medicines to patients. These innovations result in high-wage jobs; significant federal, state, and local tax revenues; and help to grow local communities.
The Pelosi plan is estimated to cost the biopharmaceutical industry $1 trillion over 10 years and could have a devastating impact on the U.S. economy with the permanent loss of nearly 1 million U.S. jobs.
Here are the facts, by the numbers:
- $1 trillion. The biopharmaceutical sector supports more than $1 trillion in U.S. economic output annually, including the direct output of the sector, the output of its vendors and suppliers and the economic activity of its workforce.
- $67 billion. The biopharmaceutical industry generated more than $67 billion in federal, state, and local personal tax revenues in 2017 alone.
- 4 million. Because of its large supply chain – which includes companies in industries ranging from construction to scientific and business services – U.S. biopharmaceutical jobs have a high multiplier effect. As a result, the industry supports a total of more than 4 million jobs across the economy.
- 1,110. The biopharmaceutical sector’s extensive U.S. manufacturing footprint encompasses approximately 1,110 facilities involved in producing prescription medicines across 45 states and Puerto Rico.
- 249. Construction spending amounted to more than $22 billion in 11 states between 2012-2017, including 249 major projects to build new or upgraded R&D and manufacturing plants. Prior to introduction of the Pelosi plan, an additional $4 billion in construction spending was anticipated to occur annually through 2020.
- 95 percent. The Pelosi plan could also lead to an excise tax on biopharmaceutical medicines of up to 95 percent of the gross sales for the medicine. This would harm the entire sector, but start-ups and smaller firms with one or very few medicines could be taxed completely out of existence. This would have a dramatic impact the ability for start-ups to raise capital to pursue promising research.
The projected impact of the Pelosi plan is so large that it may represent a tipping point that will shift biopharmaceutical R&D and manufacturing investments – and jobs – to China and other countries. Instead of blowing up the current system, policymakers should continue to pursue practical, bipartisan solutions that prioritize lowering out-of-pocket costs for patients balanced with maintaining incentives for advances needed against our most costly and challenging diseases.
Learn more about Speaker Pelosi’s drug pricing plan here.
Take action and tell Congress to stop Speaker Pelosi’s plan here.
Tom Wilbur is Director of Public Affairs at PhRMA focusing on message development and opinion research. Prior to joining PhRMA in 2019, Tom worked on Capitol Hill and on political campaigns for nearly a decade, most recently responsible for communications, campaigns and strategy for U.S. Rep. Fred Upton and the House Energy and Commerce Committee. Tom is a proud Michigander and outside of the virtual office enjoys reading, running, hiking, golfing, and spending time with friends and family.