New Report: Obama Administration Proposal in ‘Jobs Bill’ Would Destroy 238,000 Jobs

Washington  (  As the Obama Administration urges Congress to pass its ‘Jobs Bill’, a new report co-authored by a former Director of the Congressional Budget Office found the bill would reduce pharmaceutical and related employment by up to 238,000 jobs. The bill includes a provision supported by the President and Members of Congress that would require prescription drug manufacturers to pay rebates to the federal government for drugs dispensed to Medicaid/Medicare dual-eligible beneficiaries and other low-income seniors through the Medicare Part D program.

“The President and liberals in Congress are pushing proposals they claim would stimulate our economy, but would actually directly destroy American jobs,” said Doug Holtz-Eakin President of American Action Forum. “Mandatory Part D Drug Rebates would put people out of work, increase costs for seniors and privately-insured patients, and slow research and development for new drugs.”

The Office of Management and Budget (OMB) estimates that the proposal to add Medicaid-style Rebates in the Medicare Part D program would result in $135 billion in additional rebates to the federal government over ten years. These additional rebates could either constitute a direct, dollar-for-dollar reduction in revenue to the pharmaceutical industry, and could make some medicines too costly to produce.  As a result, these drugs would be withdrawn from the market and the revenue reduction would be even larger than the rebates paid to the government. This loss in revenue to the pharmaceutical industry could both reduce employment and create higher prices for consumers.

“Employment Impact of Proposed Mandatory Part D Drug Rebates,” written by the American Action Forum’s Douglas Holtz-Eakin, Robert A. Book and Michael Ramlet, focuses on reduced employment – both direct employment in pharmaceutical companies and indirect employment in companies that supply goods and services to the pharmaceutical industry. The downstream effects, such as those on distributors, pharmacies and other additional costs to the economy are not specifically taken into account.

To read the American Action Forum study, please click here.

The American Action Forum is a forward-looking policy institute dedicated to keeping America strong, free and prosperous.  It seeks to promote common-sense, innovative, and solutions-based policies that will reform government, challenge out-dated assumptions, and create a smaller, smarter government that will serve its citizens better.