Overcoming Pharmaceutical Barriers
Ways and Means, Health, More Cures for More Patients: Overcoming Pharmaceutical Barriers, February 5, 2020
While it is not possible in this Congress (unless Democratic Leader Schumer steal two members from the Majority), some form of single-payer insurance is likely, whether it is a public option under the Affordable Care Act, Medicare for All or the latter with an tax exemption for ESOPs and Cooperatives. This is discussed in Attachment One. Regardless of which form it takes, the main issue is paying for it.
This is addressed in Attachment Two, which proposes consumption tax funding rather than the payroll taxes (including at high income levels. If there is no option for employer funding, an invoice value added taxes, which would be border adjustable. If there is such an option, an employer paid subtraction VAT is proposed. Because this tax would shift employer provided funding rather than using the Treasury to distribute it, it would collect nothing and not be border adjustable.
Last year in comments to Senate Finance, House Budget and the full committee, we commented about how to fund orphan drugs and new treatments so that no one remains untreated due to insurance coverage.
A main problem with high cost drugs, especially orphan drugs, is the high development costs and the cost of small batch manufacturing. This could drive the need to raise drug prices for mature drugs in order to subsidize the orphans, although some hikes are undertaken because no one can stop them. The solution for this is for NIH and the FDA to own the rights to orphan drugs and to contract out research and development costs as it does basic research, as well as testing and production.
PhARMA would still make reasonable profit, but the government would eat the risk and sometimes reap the rewards. HIH/FDA might even break even in the long term, especially if large volume drugs which were developed with government grants must pay back a share of basic research costs and the attached profits, as well as regulatory cost.
Attachment - Single-Payer, June 12, 2019
Attachment - Tax Reform
While it is not possible in this Congress (unless Democratic Leader Schumer steal two members from the Majority), some form of single-payer insurance is likely, whether it is a public option under the Affordable Care Act, Medicare for All or the latter with an tax exemption for ESOPs and Cooperatives. This is discussed in Attachment One. Regardless of which form it takes, the main issue is paying for it.
This is addressed in Attachment Two, which proposes consumption tax funding rather than the payroll taxes (including at high income levels. If there is no option for employer funding, an invoice value added taxes, which would be border adjustable. If there is such an option, an employer paid subtraction VAT is proposed. Because this tax would shift employer provided funding rather than using the Treasury to distribute it, it would collect nothing and not be border adjustable.
Last year in comments to Senate Finance, House Budget and the full committee, we commented about how to fund orphan drugs and new treatments so that no one remains untreated due to insurance coverage.
A main problem with high cost drugs, especially orphan drugs, is the high development costs and the cost of small batch manufacturing. This could drive the need to raise drug prices for mature drugs in order to subsidize the orphans, although some hikes are undertaken because no one can stop them. The solution for this is for NIH and the FDA to own the rights to orphan drugs and to contract out research and development costs as it does basic research, as well as testing and production.
PhARMA would still make reasonable profit, but the government would eat the risk and sometimes reap the rewards. HIH/FDA might even break even in the long term, especially if large volume drugs which were developed with government grants must pay back a share of basic research costs and the attached profits, as well as regulatory cost.
Attachment - Single-Payer, June 12, 2019
Attachment - Tax Reform
posted by Michael Bindner at 2:00 PM
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