As many as 238,000 pharmaceutical jobs may be lost in a decade in the US if President Obama’s proposed American Jobs Act is introduced, a new report warns.
The Act proposes that manufacturers of prescription drugs would pay rebates to the federal government for medicines used in both the Medicare and Medicaid health schemes and Medicare’s prescription drug benefit, known as Part D.
The report says that mandatory Part D rebates would see jobs cut, increase the cost of medication for the elderly and slow R&D with pharma absorbing the new charges.
This would result, it adds, in reduced payroll employment, reduced profits and possibly higher prices for other buyers.
President Obama introduced the bill in September, but faced stiff opposition from Republicans in the Senate who rejected the measure in the chamber vote.
The Office of Management and Budget (OMB) estimates that if the Act were introduced, the rebates would result in $135 billion paid to the federal government over the next ten years.
The report, published by the American Action Forum, a free-market policy think tank, says that “at a minimum, these additional rebates would constitute a direct, dollar-for-dollar reduction in revenue to the pharmaceutical industry”.
It also forecasts that hundreds of thousands of job losses would come from direct employment within the pharmaceutical industry and indirectly from suppliers.
After the rejection by the Senate, President Obama is now touring the US with the aim to increase support for the Act, which according to some economists, could actually create up two million jobs and see the economic growth by two percentage points.