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Commentary: Bridgewater Mayor Daniel Hayes, Jr. Says ‘Medicare Changes Would Crush Innovation’ in New Jersey

8/5/2016

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Bridgewater, NJ ― Bridgewater Mayor Daniel J. Hayes, Jr. wrote an op-ed that was published on August 4 in the Cherry Hill Courier Post 4 regarding the Obama Administration’s Medicare Part B and Part D proposals and their impact on New Jersey innovation and jobs.
 
Mayor Hayes writes:
 
New Jersey has a long and proud history of producing innovators, from Thomas Edison to Albert Einstein to Selman Waksman, the Rutgers professor who won a Nobel Prize in 1952 for discovering streptomycin, the treatment that helped wipe out tuberculosis in much of the world.
 
In many cases, the legendary innovators were businesses like Bell Labs — known as “The Idea Factory” — and the Sarnoff Corp., which gave us color television. Today, numerous high-tech companies, including two of the world’s five largest pharmaceutical firms, are headquartered in the Garden State.
 
Unfortunately, federal officials are considering policies that would all but end New Jersey’s track record of innovation. Their proposed changes to Medicare, the insurance program for senior citizens, could harm nearly every New Jerseyan.
​New Jersey’s economy rests on a bedrock of medical innovation. Biotech companies provide more than 65,000 direct jobs in the state and support an additional 300,000 jobs outside the biopharmaceutical sector.
 
And these are high-quality jobs. Those directly employed by the industry earned $11.3 billion in 2014 in wages and benefits.
 
Furthermore, drug companies have almost 16,000 relationships with local New Jersey businesses. They buy about $8 billion in goods and services each year from such vendors.
 
In 2014 alone, the biopharmaceutical sector supported $108 billion in economic output across the state.
 
Bridgewater is home to 25 pharmaceutical and life science companies. They vary from multinational Fortune 100 industry leaders to small startups. Together, they bring highly talented individuals collaborating on improving the quality of health care in our society. The life-extending and lifesaving therapies they produce are of almost immeasurable value.
 
These companies bring more than just economic benefits to New Jersey citizens, though.
 
For instance, New Jersey ranks eighth in the country in life expectancy, at 80.3 years.  This is up from 77.3 years in 1999 and 75.5 in 1990. Meanwhile, the state ranks 11th in mortality rates, a sharp improvement from its 25th ranking in 1997.
 
These gains aren’t a coincidence. Living in a state that’s home to numerous biopharmaceutical firms has its advantages — often New Jerseyans receive the benefits of innovative therapies before others do. In 2013 alone, more than 25,000 residents participated in more than 1,200 clinical trials for innovative drugs.
 
A healthier population is a more productive population. The fewer New Jersey workers who are in doctor’s offices and hospitals, or staying home sick, the more who are at work adding value to the economy. Drugs researched, developed, and made in New Jersey promote a more dynamic work force.
 
Despite the value that they bring to the state, New Jersey’s medical innovators remain vulnerable to outside influences. One of those threats is a proposed change to Medicare Part B, which covers outpatient treatments like chemotherapy.
 
Under this new rule, federal payments to doctors for many outpatient drugs would drop dramatically. The reimbursement cuts may discourage doctors from treating patients with advanced therapies — the very drugs that are made by New Jersey companies.
 
If use of these advanced treatments declines, the market for them would contract as well. Companies won’t invest in creating new medications if doctors can’t use the latest drugs to treat patients. The jobs supported by advanced therapy research in New Jersey would disappear.
 
Those research cuts will ripple through the economy, harming both workers and patients.
 
Proposed changes to Medicare Part D, the prescription drug benefit, would also undermine New Jersey’s drug developers. The effort to modify the program so that government, rather than private insurers, would negotiate drug prices sounds like a money saver.
 
But the Congressional Budget Office says such a change, in practice, would require the government “to impose access or coverage restrictions” on the drugs that improve our health and extend our lives.
 
Patients who can’t obtain the medicines their doctors prescribe will become sicker, which is bad for them and the economy. And as with Part B cuts, the changes to Part D may shrink the prescription drug market and force companies to curtail research and development spending.
 
The Garden State can’t afford to lose its competitive edge. It’s the duty of New Jersey policymakers, both at the state and federal levels, to protect the state’s most innovative sector. The health of New Jersey’s economy and patients depends on it.
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