NACDS shares BAT opposition with Senate committee

WASHINGTON — The National Association of Chain Drug Stores has shared its thoughts on the proposed Border Adjustment Tax with members of the Senate Finance Committee ahead of the committee’s hearing this week.  In its comments, the organization outlined the impact that the BAT would have on pharmacies and patients.

For patients, NACDS noted that generics tend to be manufactured in overseas facilities under Food and Drug Administration oversight and that the effect of BAT would lead to price increases being passes along to patients. As a result, higher prices could make medication less accessible, according to NACDS, which would have an impact on adherence and healthcare costs by extension. 

“A Health Affairs study found that a 1% increase in overall prescription drug use is

associated with decreases in overall Medicaid costs by as much as $760 million annually,” NACDS said in its letter. “Both findings demonstrate that higher cost drugs lead to lower drug utilization by patients, which leads to higher healthcare costs in the long run, whereas lower drug costs lead to better drug utilization by patients and healthcare cost savings in the long run. A BAT incentivizes the former, while discouraging the latter.”

In addition to the potential impact on patient access, NACDS also notes that the overall pharmacy industry could face pressure from a BAT. Because pharmacies rely heavily on imported products, a BAT would lead to higher prices that wouldn’t be offset by a tax deduction on the cost of imported drugs, NACDS said, adding that one potential result could be layoffs.

“If pharmacies suffer financial losses because of a BAT, then they would have to streamline their businesses and one path that some will choose will be cutting staff,” NACDS said. “The goal of this hearing is to discuss ideas for job growth within the United States, but as far as pharmacy is concerned, a BAT likely reduces the number of pharmacy jobs in the United States; it does not increase them.”

This week’s comments follow NACDS’ May submission of comments alongside the Americans for Affordable Products coalition to the Houe Ways and Means Committee outlining its opposition to the BAT.