400 North Capitol Street, NW
Washington, DC 20001
- Toll Free 1.888.564.6273
- Local 202.783.3870
Much has been written on the variety of ways in which ObamaCare is making life more difficult for Americans. The millions of plan cancellations and rising premiums have been justifiably getting the lion’s share of media coverage, but with any law as broad and far-reaching as ObamaCare, there are bound to be other, more indirect effects that, while equally important, are less obvious or easy to pin down.
One of these areas is the medical research and development sector. For decades, America has led the way in medical innovation, far outstripping every other country. A big part of the reason for this has been an enormous profit motive. American tradition of free enterprise has created strong incentives for innovation and, as a result, the overwhelming majority of U.S. health care research comes from the private sector, which doesn’t need mandates to explore new technologies.
But if one of the goals of ObamaCare was to make America’s health care system more socialistic, it’s certainly succeeding, as investments in health R&D are increasingly being driven overseas by the new regulations.
The Wall Street Journal reports that the $500 billion in new taxes imposed by the law, including the 2.3 percent medical device tax that hits innovators especially hard, are causing a large number of medical companies to relocate and to cut jobs. Additionally, the Food and Drug Administration’s regulatory review process for new medical devices is now longer and more onerous than in the European Union. Why would anyone want to invest millions developing a device that will sit in a dusty FDA office for more than two years before even being able to be sold?
The effects of ObamaCare on medical research will be particularly disastrous for several reasons. First, health care innovation has long-term benefits for millions of people. Innovation builds on innovation, so the spillover effects from R&D have the potential to be enormous. A reduction in private sector research that is not motivated by market forces, but instead by taxes and regulations, can only have bad consequences.
Second, the economy is already bad enough as it is, without further lost jobs due to excessive taxation. In contrast to the much-decried corporate inversions, where companies move their corporate headquarters overseas to minimize their tax burden, but otherwise maintain their domestic operations, the loss of health care jobs carries actual economic consequences. Americans aren’t exactly at liberty to trade with other countries when it comes to medicine, in the same way we trade consumer goods. The FDA puts a stop to that.
Third, this will further decrease Americans’ access to medical care. Combined with the doctor shortage, the higher premiums, and the longer wait times that are inevitable consequences of ObamaCare, a lack of research and development means still fewer options for sick people trying to get care. These are problems that will only compound with time.
The more we see of ObamaCare’s effects, the more it becomes clear that there is virtually no area of health care that is not worsened by this law. When companies are actually going to Europe (Europe?!) in order to escape high taxes and strict regulation, you know that something is deeply, deeply wrong.