ERIC DEAN: Promote Policies that Nurture Innovation and Jobs to Produce Cures

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The Pharmaceutical Industry Labor-Management Association (PILMA), a coalition of companies in the biopharmaceutical industry and building construction trades unions, is committed to dual goals of fostering innovation of life-saving cures and securing high-quality union construction jobs.

As Chairman of PILMA, I’m invested in the issues that are of importance to our biopharmaceutical industry partners and customers, to the extent that they are of importance and have a connection to the livelihoods of our members and their families. As our industry partners remain healthy, their investment in research and manufacturing facilities – to a very large extent built by our members – grows as well. 

Last month, the Washington Post wrote about proposed legislation in the Maryland legislature that would “create a commission to decide the maximum amount that health plans, pharmacies and state programs could shell out for the most expensive brand-name and patented medications.”

This so-called transparency legislation is being proposed in a number of states throughout the country, but the Maryland bill is the most egregious of any put in print. This measure essentially caps growth of businesses in the state. This creates a toxic environment for the biopharmaceutical industry that is not only anti-business but anti-jobs. If profits are capped, there is less incentive to discover new medicines, investment in new facilities dries up and jobs are lost.

The biopharmaceutical industry is a major economic driver in Maryland. In 2015, it provided over 24,000 direct jobs in the state and another 87,000 indirect jobs. Our partners in the biopharmaceutical industry depend on union labor to build state-of-the-art research and manufacturing facilities to rigorous standards. If this bill is passed, the effects on the building and construction trade unions would be significant both immediately and in the long term.

Here’s why – the building trades unions invest over $1 billion each year in apprenticeship training programs where members learn cutting-edge techniques to be the safest, most productive and highest skilled workers in the world. Behind every apprenticeship there must be a job supporting it. Apprentices earn while they learn, graduate debt free and all this is done using no taxpayer money. Without the promise of jobs provided by industries like the pharmaceutical industry, the program would not exist.

Aside from the loss of jobs, this legislation has other unintended consequences. The Federal Trade Commission has determined that the disclosure of this type of sensitive information could disrupt competitive forces within the industry, leading to price increases and medicine shortages. To make matters worse, there is nothing in the legislation that would prevent a company from being required to reveal confidential contractor bids, providing a roadmap for out of state, non-union, low cost contractors to underbid skilled union craft contractors.  

Several good ideas have been proposed to control cost and increase choice and access to medicines – but this transparency bill is not one of them. In New Jersey, state Senator Steve Sweeney (an International Vice President of the Ironworkers Union) saved the state an estimated $1.5 billion by creating a competitive bidding process for Pharmacy Benefit Managers (PBMs) to win the state’s healthcare business. In Maryland, another proposed policy is eliminating the gag rule, which prohibits pharmacists from telling patients when a medicine would be cheaper by paying out-of-pocket and not going through insurance. This is an unacceptable, opaque policy that allows PBMs to pad their pockets when patients overpay at the pharmacy counter. There are systematic problems with third parties in the healthcare system that through reform, can result in direct savings for patients.

We all want laws that help protect our access to good and affordable healthcare, but this so-called transparency legislation is a failed approach at legislating. While it makes for good politics, it is bad policy. Of the three states which have passed similar legislation, two have been mired in litigation, costing state and taxpayer dollars.

It takes an average of 10 years and $2.6 billion to bring a drug to market. Without safeguards in place to protect this type of confidential information that promotes competition, the industry would lose critical incentives to discover life-saving cures and treatments. As a result, capital investment in research and manufacturing facilities that provide millions of jobs for working families could become at risk. 

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