Skip to main content

Taxpayer's Tab: NTUF looks at Medical Innovative Prize Fund Act

Vol. 2 Issue 29 August 30, 2011

 

Welcome to the Taxpayer's Tab -- the weekly newsletter for up-to-the-minute research from the National Taxpayers Union Foundation's BillTally Project.

Each week, NTUF will bring you updates on the week's most and least expensive bills, the ones with the most cosponsors ("the most friended"), and a few bills we've termed Wildcards -- bills that we think you might find interesting.

Most Expensive Bill of the Week

The Bill: S. 1137, Medical Innovative Prize Fund Act

Annualized Cost: $100.717 billion ($503.587 billion over five years)

Making investments to develop and improve medicines and vaccines is an expensive venture. A new drug can cost as much as $1.3 billion, which includes creating and selling the drug itself, clinical testing, and waiting for approval from the Food and Drug Administration (FDA). As these high costs and processes require significant investments and infrastructure, large drug companies are typically the only entities able to make a new drug or vaccine. However, even with such resources available, companies rely on drug patents and their ability to price the drugs to recover research and development (R&D) costs.

Senator Bernard Sanders (VT) introduced the Medical Innovative Prize Fund Act to separate R&D incentives from the prices of new drugs. S. 1137 would take away any exclusive rights drug companies have with regards to the drugs they develop. By removing all drug patents, generic companies would have ready-access to also manufacture new drugs, which would likely reduce prices for consumers, but also reduce incentives to develop new drugs.

To offset the loss of patent rights, Senator Sanders' proposal would create a new award system for the creation of new drugs. The Fund for Medical Innovation Prizes would award prize payments to producers and researchers who create new drugs, biological products (such as vaccines), or manufacturing processes. Companies receiving R&D innovation prizes would be required to be fully transparent in how new drugs are created.

S. 1137 defines the proper funding level for the new system at 0.55 percent of Gross Domestic Product (GDP) for the preceding fiscal year. For example, $94 billion would be deposited into the Fund if it were in operation for FY 2013. The federal government would fund the initial start-up of the Fund with public dollars; however a new fee would be imposed on health insurance providers to sustain the Fund over the long-term. Fees would be based on a progressive formula -- requiring companies collecting more in net premiums to pay comparatively higher rates -- and on how much the federal government spends on health care per year. Government programs, such as Medicare and Medicaid would not be subject to the new fee.

Citing GDP projections listed in the Congressional Budget Office's (CBO) August 2011 Budget and Economic Outlook, NTUF was able to determine that S. 1137 would result in $504 billion in new spending for the first five years.

To learn more or discuss this bill visit WashingtonWatch.com.

 

Least Expensive Bill of the Week

The Bill: S. 1376, a bill to conform income calculations for purposes of eligibility for the refundable credit for coverage under a qualified health plan and for Medicaid to existing federal low-income assistance programs

Annualized Savings: -$1.7 billion (-$5.2 billion over three years)

Introduced by Senator Michael Enzi (WY), S. 1376 would change how the federal government calculates income for the purposes of determining an individual's eligibility for certain government health care programs. Currently, some Social Security and Railroad Retirement benefits are not counted as income when an individual applies for Medicare or for insurance coverage offered by the new health care insurance exchanges that were created by the recent health care bill. S. 1376 would require that all Social Security and Tier 1 Railroad Retirement benefits be included in that eligibility calculation.

S. 1376 would cause a number of people to switch insurance coverage plans. With more individuals exceeding Medicaid's income thresholds, CBO estimates that Medicaid enrollments would fall by between 500,000 and 1 million individuals, depending upon the year. Many of those individuals would then be eligible for assistance from the health insurance exchanges. A number of individuals who were eligible for the health insurance exchanges prior to S. 1376, would no longer be eligible for subsides under the new income guidelines and would either have to acquire private insurance or become uninsured.

Based on the changes in enrollment, CBO estimates that S. 1376 would reduce federal spending by $5.2 billion over three years, or $1.7 billion per year.

To learn more or discuss this bill visit WashingtonWatch.com.

 

Most Friended

The Bill: H.R. 91/H.R. 2417/S. 395, Better Use of Light Bulbs Act

Annualized Cost: -$8 million (-$30 million over four years)

Number of Cosponsors: 69 Congressmen, 35 Congressmen, and 29 Senators

The Energy Independence and Security Act of 2007 effectively phased out the sale of certain incandescent light bulbs between 2012 and 2014. Incandescent bulbs will no longer be sold or purchased after 2020. Instead of traditional bulbs, consumers would have to purchase energy-saving compact florescent bulbs.

Congressman Joe Barton (TX-6) and Senator Michael Enzi (WY) introduced the Better Use of Light Bulbs Act to repeal the 2007 light bulb regulations. The bill also prohibits any level of government from establishing requirements or standards for any lights containing mercury.

Enacting this legislation would cut funding for programs that are designed to improve the energy-efficiency of lighting equipment. CBO estimates the savings would total $30 million over four years.

Cosponsors of H.R. 91 include one Democrat and 68 Republicans, while H.R. 2417 has 35 Republican cosponsors. S. 396 is supported by 28 Republican Senators.

To learn more or discuss this bill visit WashingtonWatch.com.

 

 

  

With the new partnership with WashingtonWatch.com, The Taxpayer's Tab will also be changing to help you keep an eye on Congress. To give your own input, opinions, and research, click on the WashingtonWatch.com icon. You will go directly to that bill's page!


The Wildcard

The Bill: H.R. 1901, Saving America's Youth: the Youth Employment Act (SAY YEA) of 2011

Annualized Cost: $6.5 billion ($32.5 billion over five years)

Congressman Bobby Rush (IL-1) introduced H.R. 1901 to combat youth unemployment. SAY YEA would establish state employment and on-the-job training programs for both jobless youth and Americans otherwise unemployed. A National Public Service Employment Program would also be established to improve the nation's parks, roads, and education facilities.

Tax credits would be offered to businesses to employ youth and other workers. However, the credits would be non-refundable and so would not be counted as new spending.

As outlined in the bill, the government would be authorized to spend $6.5 billion each year. Almost half of the spending would occur in the new public service program with a $3 billion annual spending authorization.

To learn more or discuss this bill visit WashingtonWatch.com.


Missed an Issue of The Tab?

Read them online

Issue 28 - Aug 23

Issue 27 - Aug 18

Issue 26 - Aug 9

Issue 25 - Aug 2
July Snapshot


 

We Want You!

NTUF is looking for fall and winter associate policy analysts to participate in our internship program. Associates assist with BillTally research and other policy projects. Academic credit is possible. Email questions to ntuf@ntu.org. To apply visit our internship page. Join us and help keep a tab on Congress!


 

About NTUF

The National Taxpayers Union Foundation is a research and educational organization dedicated solely to helping citizens of all generations understand how tax policies, spending programs, and regulations at all levels affect them now and in the future. Through NTUF's timely information, analysis, and commentary, we're empowering citizens to actively engage in the fiscal policy debate and hold public officials accountable every day.

NTUF is a 501(c)(3) research and education organization. Donations are deductible for personal income tax purposes. Please make a donation today to help further NTUF's mission of research and education!

This information is for educational purposes only and is not intended to aid or hinder the passage of any legislation or as a comment on any Member's fitness to serve.

 

 



108 N. Alfred St. Alexandria, VA 22314