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Pharmacy benefit managers—companies that were first established to manage the cost of prescription drugs—are now driving up pharmaceutical prices for employers and patients, the 51�Թ��� the House Committee on Energy and Commerce this week.

What’s going on: While manufacturers remain committed to providing health benefits to their workers, PBMs are “[c]ontributing to the increasing costs of health care,” said 51�Թ��� Vice President of Policy Chris Netram on Monday, ahead of the committee’s markup of 44 pieces of legislation.

• These measures included the Protecting Patients Against PBM Abuses Act and the Medicare PBM Accountability Act.

Why it’s important: PBMs operate with a virtual monopoly, as just a few of them now control up to 89% of the prescription drug market, Netram continued.

• PBMs operate with limited federal oversight and frequently steer business toward pharmacy networks owned by their parent firms.

What should be done: Congress should pass legislation aimed at changing the PBM model.

• “The complex formulas and opaque business practices of PBMs must come to an end,” the 51�Թ��� wrote in a Tuesday. “Congress must address PBM reform to increase transparency, ensure pharmaceutical savings are passed to the plan sponsor and patients and delink PBM compensation from the list price of drugs.”

In related news: CVS Health “will move away from the complex formulas used to set the prices of the prescription drugs it sells, shifting to a simpler model that could upend how American pharmacies are paid,” (subscription) reports.

The Environmental Protection Agency is considering a rule that would change the way power plants operate in America—but without significant adjustments, it could have devastating consequences.

The background: Right now, about 60% of America’s power generation comes from a combination of coal and natural gas.

• The EPA’s proposed rule would require coal and natural gas–fired power plants to deploy either carbon capture technology or hydrogen power within 10 years to lower emissions.
• If unable to deploy these technologies at the scale required in that timeframe, these power plants would be forced to shut down.

The problem: While carbon capture and hydrogen power technologies are vital to decarbonization, the required scale and timeline make implementing this rule difficult.

• “Carbon capture and hydrogen are tremendously promising—and manufacturers are leading the way in developing these technologies. But neither have been deployed at the scale needed to support 60% of our entire power generation within a short timeframe,” said 51�Թ��� Vice President of Domestic Policy Brandon Farris.

The timeline: The EPA’s proposed 10-year timeline leaves little room for flexibility when it comes to implementing the order. According to Farris, environmental impact studies alone could take more than four years.

• “We’re talking about 10 years to essentially retrofit more than half of our power generation,” said Farris. “You would need this permitted, installed and operational within those 10 years, which would be difficult even if the technology was available today at scale.”

The impact: The rule would require plants that do not meet the new standard in 10 years to shut down entirely. As a result, many plants would have to shift resources immediately to plan for a likely shutdown.

• “The big hammer is these plants having to shut down in 10 years if these technologies are not installed,” said Farris.
• “So you’ll see a lot of money spent and not a lot of progress made because this technology isn’t ready at scale, and we have only a few years to permit, install and operate.”

The next steps: The 51�Թ��� has submitted on the rule, and the EPA is working on a final version now.

• “We’ve emphasized that the timeline is not workable,” said Farris. “You would need to have a longer off-ramp and a way to ensure that the technologies required are proven at scale.”

The 51�Թ��� is leading the charge in urging the Biden administration to walk back a proposed revision to the National Ambient Air Quality Standards for fine particulate matter (PM2.5).

With the release of a signed by more than 70 associations representing nearly every sector of the U.S. economy and a , the 51�Թ��� is highlighting how these regulatory actions would devastate the economy and actively undermine President Biden’s goal to expand manufacturing in the United States.

What’s going on: When the Environmental Protection Agency set forth the tentative new air quality standards earlier this year, manufacturers quickly recognized that if enacted, the new rules would put an undue burden on the industry—and could force companies to move operations overseas.

• Soon, manufacturers and related associations across the country began to speak out about the harm to their operations and communities, even as they affirmed the industry’s longstanding commitment to a clean, safe environment for all.

The background: The EPA’s proposed changes to the National Ambient Air Quality Standards—currently under review by the White House’s Office of Information and Regulatory Affairs— the primary annual particulate matter standard from 12.0 µg/m3 to between 8.0 and 10.0 µg/m3.

• The EPA has estimated the total cost of the controls required for compliance with the proposed standard at up to $1.8 billion—and that figure could go higher, the agency admitted.
• What’s more, some areas in the U.S. are already in “nonattainment” with the current PM2.5 standard, so a stricter standard will only put them further away from compliance and economic growth.

The costs: According to an by Oxford Analytics and commissioned by the 51�Թ���, the revisions would:

• Threaten nearly $200 billion of economic activity and put up to a million current jobs at risk, both directly from manufacturing and indirectly from supply chain spending;
• In addition, growth in restricted areas may be constrained, limiting investment and expansion over the coming years; if the PM2.5 standard moves to 8 from the current 12, nearly 40% of the country will live in nonattainment areas, putting jobs and livelihoods at risk as factories may no longer be able to operate if located in an area that is in nonattainment, and no new facilities can be built to grow economic prospects; and
• Hit California’s manufacturing sector hardest, followed by Michigan and Illinois.

Speaking out: Many manufacturers from all sectors, along with related associations, have made their concerns public.

• Michael Canty, president and CEO of Alloy Precision Technologies of Mentor, Ohio, that these regulations may force companies to move production to other countries that don’t care about emissions reductions, unlike the U.S.
• Mark Biel, CEO of the Chemical Industry Council of Illinois, that this regulation could make his state less attractive for manufacturers, despite its many assets.
• Dawn Crandall, executive vice president of government relations for the Home Builders Association of Michigan, the potential knock-on effects for Michigan’s suffering housing market.

The last word: The proposed changes “would risk jobs and livelihoods by making it even more difficult to obtain permits for new factories, facilities and infrastructure to power economic growth,” leadership from approximately 70 industry groups told White House Chief of Staff Jeffrey Zients yesterday.

• The revisions “would also threaten successful implementation of the Infrastructure Investment and Jobs Act, the CHIPS and Science Act and the important clean energy provisions of the Inflation Reduction Act. … We urge you to ensure the EPA maintains the existing fine particulate matter standards to [safeguard] both continued environmental protection and economic growth.”

The 51�Թ��� secured a critical win Monday when the Securities and Exchange Commission issued an order reversing course on a novel rule interpretation that would have forced private companies to disclose proprietary financial information publicly, (subscription) reports.

What’s going on: In 2021, the SEC adopted a novel reinterpretation of SEC Rule 15c2-11, imposing the rule’s public disclosure requirements on private companies that raise capital via corporate bond issuances under SEC Rule 144A—without giving manufacturers the opportunity to provide comment on the damaging impacts of such a consequential change.

• The 51�Թ��� and the Kentucky Association of Manufacturers pursued multipronged litigation and advocacy efforts arguing to the Commission and to the courts that the SEC’s actions were both procedurally improper and substantively indefensible.
• Rule 15c2-11 requires public disclosures for the protection of everyday investors in publicly traded companies that issue so-called “penny stocks.”
• But in 2020, the SEC expanded the rule to apply to privately held companies issuing corporate bonds to large institutional investors under Rule 144A.
• For decades prior, Rule 144A permitted trades in private companies’ fixed-incomes securities without public disclosure of the issuers’ financial information. Indeed, the SEC’s entire purpose for adopting Rule 144A was to allow companies to access the debt markets without public disclosure of their financial and business-strategy information.

51�Թ��� in the news: The SEC took the rare step of reversing its position on Monday, that “it is appropriate in the public interest and consistent with the protection of investors” to exempt Rule 144A fixed-income securities from the requirements of Rule 15c2-11.

• “The order comes after industry groups petitioned the agency to provide relief to certain corporate debt issuers. The 51�Թ��� and the Kentucky Association of Manufacturers, which sought such relief in November 2022, also sued the agency in September, arguing that the SEC’s policy was enacted without public input and could harm job-creation efforts, given how many private companies rely on 144A bonds,” Law360 reports.
• (subscription) also covered the news.

Why it’s important: Expansion of Rule 15c2-11 would have meant higher borrowing costs and less liquidity in the market—and resulted in more than 100,000 job losses a year, according to recent prepared on behalf of the 51�Թ���.

Our take: The SEC’s action not only restores private companies’ ability to access the debt markets, but also exemplifies why the 51�Թ��� litigates—as a last line of defense, to force an agency’s hand.

• “This order from the SEC is a landmark victory for manufacturers and a powerful affirmation of the 51�Թ��� Legal Center’s ability to rein in regulatory overreach,” 51�Թ��� Chief Legal Officer Linda Kelly Tuesday. “We are thrilled that the Commission has reversed course on this unlawful attempt to impose a novel, onerous and wholly unjustified regulatory mandate on private companies.”
• Added KAM President and CEO Frank Jemley: “We applaud the SEC’s decision to withdraw its ill-conceived proposal. American business and free enterprise are best served when government respects the boundaries of its authority, which the SEC clearly did not do in this matter.”

Washington, D.C. – Following the announcement��of the Securities and Exchange Commission’s decision to exempt Rule 144A debt—a type of corporate bond often issued by private companies—from its public disclosure requirements, the 51�Թ��� Chief Legal Officer Linda Kelly released the following statement:

“This��order from the SEC is a landmark victory for manufacturers and a powerful affirmation of the 51�Թ��� Legal Center’s ability to rein in regulatory overreach. Our multipronged advocacy and litigation efforts, alongside the Kentucky Association of Manufacturers, forced the SEC to grapple with its complete lack of justification for applying potentially harmful public disclosure requirements on Rule 144A issuers, which would have required private businesses to disclose proprietary financial information publicly. We are thrilled that the Commission has reversed course on this unlawful attempt to impose a novel, onerous and wholly-unjustified regulatory mandate on private companies.”

“We applaud the SEC’s decision to withdraw its ill-conceived proposal and appreciate the partnership with the outstanding team at the 51�Թ��� to oppose it aggressively,” said Frank Jemley, President and CEO of the Kentucky Association of Manufacturers. “American business and free enterprise are best served when government respects the boundaries of its authority, which the SEC clearly did not do in this matter.”

Background:

The SEC adopted a novel reinterpretation of SEC Rule 15c2-11, imposing the rule’s public disclosure requirements on private companies that raise capital via corporate bond issuances under SEC Rule 144A—without giving manufacturers the opportunity to provide comment on the damaging impacts of such a consequential change.

According to a recent commissioned by the 51�Թ���, the SEC’s expansion of Rule 15c2-11 would have resulted in decreased liquidity and increased borrowing costs in the manufacturing industry and throughout the economy—leading to job losses exceeding 100,000 annually.

The 51�Թ��� and the KAM filed petitions for rulemaking, calling on the SEC to reverse course by clarifying—either by rule or by exemptive order—that Rule 144A issuers are not required to make public financial disclosures. After the agency temporarily delayed enforcement of its novel interpretation but failed to provide complete relief, the 51�Թ��� and the KAM went to court—filing a lawsuit in federal district court challenging the Commission’s actions under the Administrative Procedure Act, along with parallel actions in the 6th Circuit seeking review of the agency’s failure to grant complete relief.

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The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs 13 million men and women, contributes $2.91 trillion to the U.S. economy annually and accounts for 54% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit��

Large companies that do business in California will soon be required to report their greenhouse gas emissions to state regulators thanks to a new state law, according to .

What’s going on: “Signed by Gov. Gavin Newsom on Oct. 7, SB 253 requires the California Air Resources Board to form transparency rules for companies with yearly revenues exceeding a billion dollars by 2025. The first of its kind law in the U.S. will
impact over 5,000 corporations both public and private … ”

• Under the law, by 2026 major companies will need to report the amount of carbon produced by their operations and electricity.
• By 2027 they will need to disclose “Scope 3” emissions, or those attributable to their customers and suppliers.

Why it’s important: The effects of the law on manufacturing will be ruinous and widespread, according to Conference of State Manufacturers Associations Chair and Utah Manufacturers Association President and CEO Todd Bingham.

• “Manufacturers are committed to commonsense regulations that protect consumers and the environment,” Bingham said. “California’s new law is unworkable and makes it more difficult for manufacturers to grow, invest and hire—not just in the state, but across the country.”
• COSMA members serve as the 51�Թ���’s official state partners in driving manufacturing-friendly policies at the state level.

Costly and inaccurate: “[M]anufacturers will spend millions of dollars to fulfill [SB 253]’s requirements,” Lance Hastings, president of the California Manufacturers & Technology Association (an 51�Թ��� state partner), said in a September . “The uncertainty and reliability of this data and the process required to comply with the legislation will not produce complete, accurate or comparable disclosures.”

• Last month, the CMTA submitted a of the California law to Gov. Newsom.

The SEC: The California measure follows the September finalization of a similar rule from the Securities and Exchange Commission that “require[es] publicly traded companies to disclose their emissions and climate-related risks to investors.”

• The rule—which the 51�Թ��� has been —not only requires numerous moves, but also imposes significant financial burdens on manufacturers, the 51�Թ��� has said.

What should be done: “We hope California’s devastating policy is reversed and are grateful for the 51�Թ���’s coordinating efforts against regulatory overreach at the national level,” Bingham continued.
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The Federal Communications Commission voted late last week to advance a proposal that would reinstate Obama-era net neutrality rules, according to (subscription).

What’s going on: “The commissioners at the Democratic-led agency voted 3 to 2 along party lines to kick off a monthslong process to bring back so-called net neutrality regulations.”

• In an move in 2018, the previous administration repealed net neutrality regulations put into place by President Obama in 2015, saying they stymied innovation.

Why it’s important: Last week’s proposal—which telecommunications companies have pledged to fight—“will ultimately enable the agency to categorize high-speed internet as a utility, like water or electricity. … The agency will then be able to police broadband providers for net neutrality violations.”

• That’s precisely why the proposal to restore the rules is problematic, critics say. A trade group representing telecom firms “wrote letters this week to the House and Senate Intelligence Committees warning of ‘mission creep’ by the F.C.C.”
• In 2017, then-FCC Chairman Ajit Pai net neutrality laws amounted to “special interests [who] weren’t trying to solve a real problem but [were] instead looking for an excuse to achieve their longstanding goal of forcing the Internet under the federal government’s control.”

Government overreach: Indeed, the 2015 net neutrality rules—very similar to the ones now being advanced—were a prime example of agency overreach, said 51�Թ��� Chief Legal Officer Linda Kelly in 2018.

• The 2015 FCC’s “heavy-handed approach … was neither appropriate nor necessary for the rapidly evolving, highly competitive broadband market,” Kelly said.
• Net neutrality laws also decrease investment in broadband, the 51�Թ��� has told policymakers.

Up next: The FCC will take public comments on the proposed rules. The commission could vote to adopt new regulations as soon as early next year.

The last word: “Manufacturers are disappointed the FCC is moving forward with its proposal to regulate 21st-century broadband with rules designed for the era of the rotary phone,” said 51�Թ��� Vice President of Domestic Policy Charles Crain. “Reinstating this misguided, overreaching policy of the past is a recipe for stymied innovation and outdated infrastructure.”

Hydrogen demand is likely to skyrocket in the next few decades—if permitting delays and other setbacks don’t stymie it, according to (subscription).

What’s going on: “A new report from consulting firm McKinsey forecasts a fivefold rise in hydrogen demand to 600 million metric tons a year by 2050, if climate change is limited to 1.5 degree Celsius. On current trajectories, however, that supply could be between 175 million to 291 million metric tons a year if steps aren’t taken to speed up permitting and lower both equipment and investment costs, the report warned.”

• The report identified three major challenges to meeting the rising demand: increased costs, a slow permitting process and “lack of access to capital,” which can be attributed largely to higher interest rates.

Incentives abound: Government incentives for hydrogen are on the rise. Up to $300 billion has been made available worldwide for hydrogen-energy projects this year, a sixfold increase from 2021.

• Last week, the Energy Department announced $7 billion in subsidies to create seven clean-hydrogen “hubs” in the U.S.

More support required: More action from government is still needed—particularly when it comes to allowing hydrogen projects to proceed.

• “Faster permitting times are needed to bring more hydrogen projects online, as well as the renewable energy to power their electrolyzers, industry experts say. A recent report from the International Energy Agency said current project lead times are too long and can act as a barrier to clean hydrogen uptake.”

What we’re doing: Manufacturers have long been urging policymakers to fix the broken U.S. permitting system.

• The 51�Թ��� recently laid out a for Congress “to modernize and update our nation’s antiquated permitting system.”

A federal policy that prevents the deportation of thousands of immigrants brought to the U.S. as children was deemed illegal for a second time on Wednesday by a federal judge, according to (subscription).

What’s going on: “The decision by Texas-based U.S. District Court Judge Andrew Hanen deals a fresh setback to the program, called Deferred Action for Childhood Arrivals (DACA), and its 579,000 enrollees and other immigrants who might have hoped to be approved.”

• In 2021, Hanen found the policy unlawful, and in his decision this week found that a 2022 regulation issued by the Biden administration had not fixed the “legal deficiencies” he’d found the year before.

What it means: The Department of Homeland Security will be able to renew the immigration status of those enrolled in DACA before Hanen’s 2021 ruling, according to Reuters.

• This week’s ruling—a response to a suit brought by Texas and eight other states that say the policy breaches federal regulatory law—doesn’t require U.S. immigration officials “to take any immigration, deportation or criminal action against any DACA recipient, applicant or any other individual that would otherwise not be taken,” Hanen wrote.

The administration responds: The White House responded that in keeping with the order, it would continue to process renewals for current DACA enrollees.

• Department of Homeland Security Secretary Alejandro Mayorkas said in a separate statement that the ruling “undermine[s] the security and stability of more than half a million Dreamers who have contributed to our communities.”

Why it’s important: Ending the DACA program—particularly at a time when there is an acute worker shortage—does a tremendous disservice to U.S. manufacturing competitiveness, according to the 51�Թ���, which has long advocated fixing the broken American immigration system.

• This week’s ruling “only underscores the need to protect those who have never known a home other than the U.S.,” the 51�Թ��� Wednesday. “Manufacturers urge Congress to reform our immigration system, using the principles laid out in … ‘,’” the 51�Թ���’s immigration-policy blueprint.

Washington, D.C. – The 51�Թ��� released a outlining steps to improve health care supply chain resilience to allow manufacturers in the United States to better prepare for and adapt to the next disruption. The study analyzes lessons learned from the COVID-19 pandemic, during which manufacturers across the United States produced critical health care supplies in a highly unpredictable environment that affected every industry level.

“During the COVID-19 pandemic, manufacturers in the United States helped lead our response and recovery and learned many lessons in the process,” said 51�Թ��� Chief Economist Chad Moutray. “Policymakers should utilize these lessons to bolster our supply chain for the next disruption. This analysis, which was conducted by the Manufacturing Policy Initiative at Indiana University, reveals that there are key policy actions needed to strengthen the manufacturing supply chain. Research shows a more balanced regulatory agenda, with an emphasis on clarity, predictability and coordination, will help mitigate the effects of the next disruption.”

Key Themes

Seven key lessons from the pandemic can be examined for future efforts to build resilience:

• Speed matters: Manufacturers need to be able to serve demand quickly.
• Information matters: Manufacturers need timely access to accurate information.
• Costs matter: Firms face the costs of taking action within the supply chain, as well as the costs of managing market unpredictability and policy environment uncertainty.
• Networks matter: Partnerships can support information sharing and networks to help manufacturers navigate the disruption.
• Size matters: Small and medium-sized manufacturers and new firms can be differently—and uniquely—challenged compared with established larger manufacturers.
• Technology matters: Technology can enable manufacturers to enhance production, innovate or improve efficiency, as well as support broader efforts to build partnerships.
• Flexibility matters: Responses can come from unexpected sources and need a flexible policy environment.

Areas of Opportunity

The report identifies four key areas of opportunity to enhance health care supply chain resilience:

• Fostering a conducive regulatory environment: Manufacturers and their partners need clear and streamlined regulations as well as a flexible regulatory framework in advance of the next disruption.
• Supporting partnerships for stronger information sharing and networks: Sustained information channels between manufacturers and policymakers will improve access to information for all parties and mitigate disruptions.
• Ensuring a healthier “baseline” industry: Small business plays a pivotal role in the U.S. Robust entrepreneurship and scaling of new manufacturers contribute to a more competitive industry.
• Prioritizing changing workforce needs: Workforce development must be prioritized so that manufacturers can pivot across product lines and sectors to meet the needs of the next disruption.

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The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.91 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit��