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Drug Price Controls Threaten Innovation and Patient Health

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Healthcare worker in a laboratory with equipment

The United States has a long history of medical and pharmaceutical innovation. Yet, some policymakers have suggested imposing top-down regulations or pricing rules to reduce drug prices that would put this innovation at risk.

National Association of Manufacturers Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling explains drug price controls and how they could impact everyday Americans.

What’s the problem with price controls?

Everyone agrees with the goal of reducing the costs of health care—and prescriptions in particular. The question is how to get there. One way we know will not work is via government-imposed price controls or other arbitrary measures. Non-market-based approaches like this are antithetical to the free enterprise system that forms the bedrock of our economy and way of life. Once we allow the government to run negotiations on our medicines, the government will have an even stronger incentive to run our health care—and that is exactly what many who support price controls like this would like to see.

Why is this important now? 

We are in a period of tremendous breakthroughs and medical discovery, led by pharmaceutical manufacturers in partnership with the National Institutes of Health, universities and other private groups. Pharmaceutical manufacturers spend more on research and development than any other industry, creating new treatments and cures that have the potential to save and improve millions of lives. In addition to funding R&D up front, pharmaceutical manufacturers also put a sizeable share of their revenue back into R&D so that today’s treatments can help fund tomorrow’s cures. Imposing arbitrary price controls will threaten those investments and undermine a system that is working to save millions of vulnerable people.

How should Congress approach high drug prices?

There’s no doubt that health care costs have been rising too quickly for far too long for American families. Those costs have contributed to wage stagnation for workers and discouraged other investments in the workplace. But we need to address inefficiency, affordability, improved outcomes and flexibility to drive down health care costs without abandoning market-based approaches. Any solutions should be guided by the four pillars that have made America exceptional: free enterprise, competitiveness, individual liberty and equal opportunity.

That will require a comprehensive approach to the various forces that strain the system, recognizing the importance of innovation as a tool to reduce costs and improve health outcomes. Congress should support patient access to lifesaving medicines—and the American manufacturers and researchers that deliver them—instead of upending American health care in favor of an uncertain future.

Policy and Legal

EAGL Coalition Addresses Global Regulatory Issues

As the importance of international trade continues to rise, the National Association of Manufacturers has elevated its efforts to tackle global regulatory issues that impact manufacturers through its leadership in the Engaging America’s Global Leadership (EAGL) coalition.

EAGL represents a group of U.S. industries that believe in the importance of effective American leadership within multilateral organizations, such as the United Nations, Organization for Economic Cooperation and Development and the World Health Organization.

As the U.N. General Assembly opens, the NAM’s Director of International Business Policy Ryan Ong explains EAGL’s work and importance for manufacturers.

Why are the actions of these multilateral organizations important?

They play critical roles in promoting a more stable, predictable world and tackling important global issues such as international health, development and environmental sustainability. At their best, these organizations bring together government leaders, businesses, civil society, academic experts and other key stakeholders in transparent, inclusive conversations that drive effective policies and partnerships to solve global problems.

How do these international organizations relate to the needs of American manufacturers?

These organizations can directly impact policy decisions made by national governments. Resolutions and reports from these groups shape national debates and regulations, influencing U.S. exports, jobs, and manufacturing competitiveness. This makes it critical for these organizations and their activities to be accountable to member states and inclusive of the private sector and to reflect good regulatory practices and evidence-based approaches.

What areas is EAGL most interested in?

EAGL and its members focus on initiatives that impact manufacturers at international organizations. Examples include efforts to levy new tax and operational restrictions on manufacturers, impose bans or burdensome regulatory restrictions on manufactured products, and limit the ability of manufacturers to protect critical intellectual property.

EAGL is also a strong advocate for inclusive approaches at international organizations that embrace the private sector as an indispensable partner in policies and programs to achieve global goals.

How does EAGL aim to represent manufacturers’ views at international organizations?

The coalition works with a growing network of public and private stakeholders to promote effective member state leadership through stronger coordination within and between a growing set of international business and third-party allies and direct engagement with U.S. and foreign governments in national capitals, Geneva, New York and elsewhere.

The U.N. General Assembly starts tomorrow. What should manufacturers pay attention to during this meeting?

This year’s U.N. General Assembly includes a range of events that could have an important impact on manufacturers in different sectors by shaping national regulations around the world, thus impacting their ability to export and operate in critical markets needed to compete, grow and hire.

These include a high-level universal health coverage meeting and a related political declaration that could drive manufacturing-relevant national policies on areas such as innovation, taxation and regulatory restrictions. Other events include a Climate Action Summit, high-level forums on sustainable development and development financing, as well as a wide range of side events hosted by business and civil society groups.

Policy and Legal

EPA Washes Away Controversial Waters Rule

At the National Association of Manufacturers’ headquarters last week, Environmental Protection Agency Administrator Andrew Wheeler, Assistant Secretary of the Army for Civil Works R.D. James and NAM CEO Jay Timmons announced a major victory for manufacturers. The EPA has decided to withdraw the 2015 Waters of the United States (WOTUS) rule that was finalized during the Obama administration.

Manufacturers and others have criticized the rule since 2015, arguing that it was overly broad and went much further than the Clean Water Act allowed.  In some cases, the rule—which was supposed to regulate places covered in water—was used to control land that is not wet. Opponents of the rule warned that it threatened manufacturing jobs while failing to adequately protect clean water, and a patchwork of legal challenges created uncertainty across the country and paralysis among the businesses and landowners affected.  

“The EPA and the Department of the Army finalized a rule to repeal the previous administration’s overreach in the federal regulation of U.S. waters and recodify the longstanding and familiar regulatory text that previously existed,” said Wheeler. “Last week’s Step 1 action fulfills a key promise of President Trump and sets the stage for Step 2—a new WOTUS definition that will provide greater regulatory certainty for farmers, landowners, homebuilders and developers nationwide.”

“This decision by the EPA clears away a vague and onerous rule that put impossible burdens on manufacturers and other landowners nationwide,” said Ross Eisenberg, Vice President of Energy and Resources Policy at the National Association of Manufacturers. “Americans deserve clean water, and that requires smart water policy that is practical and effective.”

Over the past four years, the NAM submitted multiple sets of comments regarding the 2015 WOTUS rule to better inform policymakers. In addition, the NAM supported President Donald Trump’s 2017 executive order instructing the EPA to rescind the rule, and the NAM’s Manufacturers’ Center for Legal Action has been in active litigation against the rule since July 2015. The legal battle included a unanimous victory for the MCLA at the U.S. Supreme Court on a key procedural issue, and earlier this year federal judges invalidated the rule.

With the 2015 WOTUS rule now rescinded, the NAM is continuing its work to provide policy insight and expertise for a new version of the rule that is consistent with the Clean Water Act and protects American waters while providing certainty for manufacturers and landowners around the country.

“Manufacturers will continue to fight for fair and clear regulations that empower us to be responsible stewards of the environment while growing the U.S. economy,” said Eisenberg. “Our industry represents more than 12.8 million employees in communities across the country, and we are committed to ensuring that the environment in which they live and work is safe, clean and well-protected.”

Workforce

NAM in 5 Photos: Week of Sept. 9

This week, the National Association of Manufacturers helped move the manufacturing industry forward on three major fronts.

VIEW THE PHOTO GALLERY

 

Workforce

Manufacturing Institute to Expand FAME Apprenticeship Program

The National Association of Manufacturers, the Manufacturing Institute and Toyota Motor North America on Tuesday announced the operational and stewardship transition of Toyota’s Federation for Advanced Manufacturing Education (FAME) program to the MI.

NAM CEO Jay Timmons and MI Executive Director Carolyn Lee were joined by Advisor to the President Ivanka Trump at Alabama Robotics Technology Park in Huntsville, AL, for the announcement.

FAME apprentices receive a two-year industrial degree, Advanced Manufacturing Technician, while working in their sponsor’s manufacturing facility. FAME trains students of all ages and backgrounds, from recent high school graduates to experienced manufacturing employees looking to advance their careers.

FAME chapters are currently operating in 13 states, and the MI will expand the program nationwide.

Education pathways to skilled careers and an expansion of apprenticeship programs are key goals of the NAM and MI’s Creators Wanted Fund, a campaign to inspire more Americans to pursue careers in modern manufacturing.

For more information, read the MI’s press release.

Click here to see photos from the event

Policy and Legal

Manufacturers Urge Quick, Vital Action on Ex-Im Bank Reauthorization

Today, more than 200 companies and organizations called on the U.S. House and Senate to pass a “robust and long-term reauthorization” of the Export-Import Bank before its charter expires at the end of September.

As the U.S.’ official export credit agency, the Ex-Im Bank’s mission is to support American jobs through facilitating U.S. exports. Since 2000, the Ex-Im Bank has supported nearly $450 billion in exports from thousands of mostly small- and medium-sized companies and helped support over 2.5 million American jobs.

The Ex-Im Bank has become more important in recent years given the rise of other countries’ export credit agencies, from China’s three agencies to those in Germany, Canada and beyond, making Ex-Im Bank a vital tool to level the playing field internationally for industries in the United States that need to increase foreign export sales to continue creating well-paying American jobs.

“With more than 100 foreign export credit agencies seeking to help their industries and workers win sales at the expense of ours, manufacturers and their American workers need Congress to do its job and secure a long-term and robust reauthorization of the Ex-Im Bank before the end of September,” said Linda Dempsey, Vice President of International Economic Affairs Policy at the National Association of Manufacturers. “Failure to act quickly will put billions of dollars in exports and tens of thousands of manufacturing jobs at risk.”

Kimberly Reed, who serves as the Chairman and President of the Ex-Im Bank, joined the NAM this week for a roundtable on the Bank’s importance to agricultural and manufacturing exports, explaining how the Ex-Im Bank can provide support for businesses of all sizes in the agriculture and manufacturing sectors.

Manufacturers across the U.S. know that allowing the Ex-Im Bank’s charter to lapse would put our country’s businesses at a disadvantage in an increasingly global market, undermining future access to foreign customers. Even a short disruption can have serious effects; according to NAM estimates cited in the letter, when the lack of a board quorum curtailed the Ex-Im Bank’s activities in 2015, manufacturers in America lost $119 billion in output, resulting in 80,000 fewer American manufacturing jobs in 2016 and 2017 alone.

Reauthorization of the Ex-Im Bank has extensive, bipartisan support in Congress, reflected in the cosponsorship of the Export-Import Bank Reauthorization Act of 2019, which was introduced by Senators Kevin Cramer (R-ND) and Kyrsten Sinema (D-AZ) with broad backing. With the Bank’s charter set to expire, Congress has limited time to prevent a serious blow to manufacturing workers, farmers and other industries in America.

“With increasing headwinds in the U.S. and global economies, a long-term, robust Ex-Im Bank reauthorization is just the type of action businesses and workers need to create more certainty so that they can grow investment and operations across the country,” said Dempsey. “With American competitiveness and jobs on the line, there is no time to waste.”

Policy and Legal

Lower Taxes Get Cheers from Alcohol Industry

When the Tax Cuts and Jobs Act passed in 2017, it enacted a temporary reduction in federal taxes on beer, wine and spirits. Now Congress is considering making those tax cuts permanent.

The bipartisan Craft Beverage Modernization and Tax Reform Act would extend tax cuts that have allowed producers, distributors and other businesses to invest and grow. According to the Beer Institute, the beer industry provides more than 2.2 million American jobs, generating more than $350 billion in economic output. The tax reduction in the Tax Cuts and Jobs Act was estimated to save the industry $130 million per year. If that reduction becomes permanent, the industry can continue growing operations, hiring workers and creating benefits for communities nationwide.

“As a manufacturer and brewer in the United States, we’re pleased to see the tax break on brewers large and small reintroduced,” said Anheuser-Busch Chief External Affairs Officer Cesar Vargas. “Thank you to the bill’s bipartisan group of sponsors—Senators Wyden and Blunt and Representatives Kind and Kelly—for fighting to continue the first tax break on brewers and beer importers since the repeal of Prohibition. If passed, this legislation will help us redouble our investments in our industry and the communities where we live and work, and ensure our continued ability to thrive.”

Brewers and importers could use the certainty and permanence of these tax savings to develop new products, upgrade equipment and facilities and hire employees. The law would also enable brewers and importers to be more competitive in the marketplace long-term and encourage the creation of new brewery start-ups by lowering the cost of doing business. Tax relief would have a positive impact on manufacturers and employees across the supply chain, from farmers and bottlers to truckers and distributors.

“This legislation would have a critical impact for a wide range of manufacturers across the United States,” said Randolph L. Burns, Vice President of Global Government Affairs at Ohio-based Owens-Illinois (O-I), the world’s largest glass packaging producer with glass plants in 23 countries. “Businesses like ours are critical to the beer, wine, food and spirits industry, and permanently reducing the cost burden would allow us to strengthen production and support jobs.”

“Small businesses like ours rely on smart policies and reasonable costs to grow and succeed,” said John Little, co-owner and Head Distiller of West Virginia-based Smooth Ambler Spirits. “Making these tax cuts permanent would be an important step towards creating an environment that supports entrepreneurs, encourages ingenuity, and promotes local businesses across the country.”

“Manufacturers are involved in every aspect of the beer, wine and spirits industry in communities across the country, and we know how important it is that these businesses have the opportunity to invest and grow,” said National Association of Manufacturers Vice President of Tax and Domestic Economic Policy Chris Netram. “Making this tax relief permanent would support workers and employers nationwide and provide certainty for the men and women who make things in America.”

Workforce

Attract the Next Generation by Getting Involved in Manufacturing Day

Manufacturing Day, led by the Manufacturing Institute and the National Association of Manufacturers, is kicking off on Oct. 4.

Carolyn Lee, the Manufacturing Institute’s executive director, explains what makes this event unique, why it’s personally important to her and how you can get involved.

What is Manufacturing Day?

Manufacturing Day shows off what modern manufacturing looks like. Kicking off on the first Friday in October—and continuing throughout the month—this annual event helps manufacturing companies and educational institutions open their doors to students, parents, teachers, community leaders and more. Manufacturing Day shows students why they should consider a career in manufacturing and what skills manufacturing companies are looking for in job candidates.

How does Manufacturing Day make a difference for students?

On Manufacturing Day last year, hard material manufacturer CERATIZIT hosted an event in Michigan. At the beginning of the day, they asked the group who was interested in a career in manufacturing. Only three or four students raised their hands. The students then spent the day taking the tour of the facility, trying out CERATIZIT’s products and using CAD software to make their own keychains. At the end of the day, they were asked the same question about who would be interested in a career in manufacturing. This time, there were only three or four students who didn’t raise their hands!

You might think you know what manufacturing looks like today, but seeing is believing — and seeing modern manufacturing firsthand can be life-changing for students. I hope that Manufacturing Day makes a difference in the lives of the students who attend, getting them to seriously consider a career in manufacturing.

Why is Manufacturing Day important to you?

I grew up in a manufacturing family. My dad, grandfather and even my grandmother for a short time worked in manufacturing. When I was a kid, manufacturing was a lot different than it is today — and I still thought it was cool! Now, it’s even more amazing. Manufacturing careers are increasingly high-tech, and technology is increasingly an integral part of the industry. Manufacturing employees are excited about technology, and they’re excited to learn and grow in their careers.

It’s always amazing to see what the manufacturing workforce makes and what goes into making the things that improve our lives every day and how they do it. Manufacturing Day is the way for everyone to see it for themselves.

How can I get involved in Manufacturing Day?

If you’re a manufacturer, plan an event for your community on Oct. 4 (or another day in October), and make sure to register it on Manufacturing Day’s website. If you’re a student, parent or teacher, find events being held in your area using the map on our website.

Workforce

Heroes MAKE America Fuels Veteran’s Oil and Gas Career

As a child, Josh Matherne dreamed of joining the military. He realized that dream as a team supervisor in the U.S. Army infantry at Fort Hood, where he mentored younger soldiers and helped ensure that they were doing their jobs safely and successfully.

“My grandfather was in the Marines, and he really pointed me in the right direction,” said Matherne. “I always thought it was the right thing to do. As soon as I could serve, I wanted to serve.”

All the while, Matherne was interested in the oil and gas manufacturing industry. When he began to think about a civilian career, the Heroes MAKE America program was a natural fit. The program aims to build a mutually beneficial pipeline between the military and manufacturing, offering transitioning service members in-demand manufacturing skills and training, and educating manufacturers on how to recruit and retain members of the military and their families. As a student in the Heroes program, Matherne expanded his knowledge in manufacturing and tailored his resume to reflect his work ethic, determination and passion for the industry. Through the program’s regular networking opportunities, company tours and training support, the initiative helped him launch his new career.

“The Heroes program gave me an idea of what I was getting myself into,” said Matherne. “It eased my transition by getting me into the civilian mindset and taught me how to interact with civilian workers.”

Like many Heroes MAKE America participants, Matherne initially wondered if his skills would transfer into his field of interest. But shortly after he began his current role as a chemical operator at Occidental Chemical in La Porte, Texas, he found that his military training made him ideal for a position that required discipline and attention to detail. He has already been fast-tracked toward a promotion, and he has found a familiar rhythm that reminds him of his experience as an infantry team leader.

“It’s kind of like the military,” said Matherne. “The family-style team; being a part of something worth being a part of.”

Matherne continues to share open job opportunities within his company and other oil and gas companies in order to help other veterans like him find their next career in a well-paying, growing sector. He’s also mentoring new veteran hires, giving them a sense of what to expect during their transition and teaching them how they can use their past training to succeed in manufacturing.

“It’s a great atmosphere, has great people, and has a similar structure to the military,” said Matherne. “The manufacturing industry loves the drive we have and the discipline we have. They love seeing it, and they love hiring it.”

Learn more about the Manufacturing Institute’s Heroes MAKE America program.

Policy and Legal

Manufacturers Score Victory in SEC Oversight of Proxy Firms

Manufacturers won a victory yesterday as the Securities and Exchange Commission (SEC) published new guidance regarding proxy advisory firms, outlining how institutional investors should monitor their use and setting the stage for more effective oversight of the proxy firm business.

Investment advisers and fund managers who oversee Americans’ retirement savings are empowered to have a voice in the policies of the companies in which the fund invests. These fund managers often turn for assistance to proxy firms to recommend votes on company policies. As a result, proxy advisory firms have enormous influence over the corporate governance policies of U.S. public companies, impacting the direction of businesses they have no stake in and the life savings of Main Street investors. Unfortunately, a lack of oversight means proxy advisory firms can operate with undisclosed conflicts of interest and inadequate transparency, implement one-size-fits-all decision-making, and make errors that impose significant costs and damaging policies on manufacturers and workers.

The SEC’s guidance clarifies how investment advisers can utilize these firms, representing a significant step toward vital investor protections. In particular, the guidance outlines the due diligence that fund managers have to undertake when relying on a proxy firm’s services and identifies factors, such as errors, conflicts of interest, and methodological weaknesses, that fund managers should be on the lookout for.

“This decision is a big win for manufacturers across the country,” said Charles Crain, Director of Tax and Domestic Economic Policy at the National Association of Manufacturers. “With this guidance, the SEC is providing a roadmap for asset managers to protect Main Street investors’ best interests and laying the groundwork for improved oversight of the proxy advisory industry—and a smarter, more informed environment for millions of manufacturers and middle-class Americans.”

The SEC’s guidance echoes specific requests made by the NAM in their March 5 comment letter, in which the organization called for more clarity around “how investment advisers can utilize independent third parties in order to ensure that proxy voting decisions are made in the best interests of the middle-class Americans whose retirement accounts are at stake.”

The NAM has also requested additional rules that would implement direct SEC oversight of proxy advisory firms. The SEC yesterday issued interpretive guidance that its proxy rules do apply to firms providing proxy advice, and manufacturers are optimistic that further reforms will be considered and addressed by the SEC in the coming months.

“This SEC announcement represents critical direction for investment advisers and demonstrates the SEC’s understanding of the fiduciary duty these money managers owe to Americans nationwide,” said Crain. “We’re thankful that yesterday’s guidance provides critical guardrails manufacturers have called for, and we look forward to continuing this conversation to ensure that proxy voting decisions are made in the best interests of Americans saving for a secure retirement.”

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