Oct 07 2014
When I describe Obamacare as the greatest assault on our freedom in my lifetime, I can cite many reasons, from the massive tax increases to the incredible pile of new regulations to the unprecedented federal mandate to buy something.
It’s not appreciated enough just what we lose when freedom is crushed. One huge loss is the American innovation in medicine, from drugs to devices to surgical techniques. As Scott Atlas, a physician now at Stanford University’s Hoover Institution, pointed out last week in the Wall Street Journal, that innovation mostly has happened in the United States, and the majority of it has been funded by private investment.
But, Atlas points out, that investment in innovation has slowed dramatically, especially amid the miserably weak recovery of the past five years. He writes:
“But the economy's weakness itself has been exacerbated by the negative impact of new taxes and regulations under ObamaCare. According to Congressional Budget Office estimates, the new health-care law will levy more than $500 billion in new taxes over its first 10 years to help pay for insurance subsidies and Medicaid expansion. These new taxes include significant levies on key health-care industries, such as manufacturers of medical devices and drugs, and their investors.
“As a result, small and large U.S. health-care technology companies are moving R&D centers and jobs overseas. The CEO of one of the largest health-care companies in America recently told me that the device tax his company paid last year exceeded his company's entire R&D budget.”
And so, Atlas writes, companies are cutting jobs and moving R&D – and its jobs – overseas.
But it’s not just Obamacare’s taxes:
“The bureaucrats at the Food and Drug Administration are also hindering medical-technology and drug development. According to a 2010 survey of more than 200 medical-device companies by medical professor and entrepreneur Josh Makower and his colleagues at Stanford University, delays of approvals for new medical devices are now far longer in the U.S. than in many other developed countries. In the European Union—not exactly known for cutting through red tape—it takes on average seven months to gain approval for low- to moderate-risk devices. In the U.S., FDA approval for similar devices takes on average 31 months.”
This didn’t have to happen. Health care could have been improved for all without a vast increase of federal control and taxes. That, nonetheless, is the route President Obama and Democrats took. The job now is how to repair the damage already inflicted. Atlas has ideas:
“First, strip back the heavy tax burdens that currently inhibit innovation, starting with repealing the Affordable Care Act's $29 billion medical-device excise tax and the $80 billion tax on brand-name drugs. Change the tax code to add incentives for investment in early-stage medical technology and life-science companies, as well as for philanthropic gifts to academic institutions that promote tech entrepreneurs.
“And finally, simplify processes for new device and drug approvals, so that the FDA becomes a favorable rather than an obstructionist environment for these life-saving and cost-saving discoveries.”
That’s a “tall order,” Atlas writes. He’s correct. But it is one that starts with voters recognizing the reality of what is happening and acting accordingly.