Tags: Atlas | Obamacare | R&D | overseas

Hoover Institution's Atlas: Obamacare Drives Healthcare R&D Overseas

By    |   Thursday, 02 Oct 2014 12:19 PM

One negative impact of Obamacare has escaped much attention, says physician Scott Atlas, a senior fellow at Stanford University's Hoover Institution.

That's the migration of healthcare research, development and technology overseas, he writes in The Wall Street Journal.

"The overwhelming majority of the world's healthcare innovation occurs in the U.S.," Atlas remarks.

"But that environment is changing."

Annual R&D spending in the United States rose only 2.1 percent on average from 2012 to 2014, down from an average of 6 percent during the prior 15 years. During that same 15-year period, R&D spending grew at a faster rate in several Asian countries and the European Union.

The sluggish economic recovery during the past five years explains some of the U.S. R&D slowdown, Atlas notes.

"But the economy's weakness has been exacerbated by the negative impact of new taxes and regulations under Obamacare," he writes. Obamacare is estimated to impose $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 healthcare industries, such as manufacturers of medical devices and drugs, and their investors," Atlas says.

"As a result, small and large U.S. healthcare technology companies are moving R&D centers and jobs overseas."

In addition, the Food and Drug Administration is also hindering medical-technology and drug development, as delays of approvals for new medical devices are now far longer in the U.S. than for many other developed countries.

"What can be done to reverse these damaging trends?" he asks. "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."

Instead, the tax code should be changed to add incentives for investment in early-stage medical technology and life-science companies, Atlas suggests.

"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. It's a tall order, especially in today's Washington. But America's health — and wealth — depend on it."

Other economists agree that Obamacare is costing American jobs.

John Goodman, a senior fellow at the Independent Institute, says employer surveys from the Federal Reserve Banks of Philadelphia, New York and Atlanta illustrate the cutbacks.

"Roughly one-fifth are saying they're moving from full time to part time," he told Fox News. "More than one in 10 are saying they're doing more outsourcing — all this because of the new healthcare reform."

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One negative impact of Obamacare has escaped much attention, says physician Scott Atlas, a senior fellow at Stanford University's Hoover Institution.
Atlas, Obamacare, R&D, overseas
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2014-19-02
Thursday, 02 Oct 2014 12:19 PM
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