With Congress beginning to consider drug pricing legislation, a coalition is mobilizing employers to drive down drug costs by educating leaders, influencing policy
SAN FRANCISCO AND WASHINGTON – April 22, 2021 – The Employers’ Prescription for Affordable Drugs (EmployersRx), a coalition of employers formed in 2019 to advocate for policies that address the high cost of prescription drugs, will pursue a wide range of policy initiatives in 2021 aimed at making medications more affordable and accessible.
The group’s agenda aligns with the Biden administration’s objectives of reducing care costs and strengthening access while addressing the widespread health system vulnerabilities exposed by the pandemic. As leaders in the House of Representatives reintroduce major legislation to reduce the cost of drugs, the coalition is focused on ensuring policies protect private payers, not just Medicare and Medicaid.
“Large employers know what it is to compete in a free and fair market. Yet, it is clear that the market for prescription drugs is neither free nor fair,” said Shawn Gremminger, director of health policy with the Purchaser Business Group on Health. “We want to be part of the solution, but the solution needs to protect private purchasers, not just Medicare and Medicaid.”
Michael Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions commented, “Drugs continue to be one of the key areas of focus for employer plan sponsors. We need to work together for smart policy solutions to improve the affordability, equity and responsiveness of the marketplace.”
“The unprecedented achievement of developing safe and effective COVID-19 vaccines in less than a year is a testament to the value of scientific innovation and the critical role that drugs and vaccines can play in saving and improving the lives of millions,” said Ilyse Schuman, senior vice president of health policy for the American Benefits Council. “The pandemic and ensuing public health and economic crises also underscore the need to make prescription drugs more affordable and to spend resources more wisely.”
Among the coalition’s key priorities in 2021:
Supporting Policies to Reduce Costs for All Purchasers While Preserving Meaningful Innovation
Policymakers are considering a set of policies that use the federal government’s purchasing power to reduce drug prices for beneficiaries and taxpayers. To ensure these policies do not result in cost-shifting to private payers and provide direct relief to families covered by private insurance, it is essential that any policies to directly manage drug prices extend to all payers, not just public programs.
“Employers pay 80% of health care costs on behalf of our employees and their families, including for prescription drugs. Skyrocketing increases in prescription drug costs have become unsustainable and employers need the federal government to step in,” said Annette Guarisco Fildes, President and CEO, The ERISA Industry Committee (ERIC). “Changes need to be made to make prescription drug markets work, with free and fair competition, or more drastic interventions may have to be contemplated.”
Other objectives include:
Supporting Policies to Strengthen Competition and Enhance Transparency
Policymakers can take steps to indirectly reduce the cost of drugs by banning anticompetitive practices by drug makers and other actors and by enhancing price transparency. Among other strategies, this includes eliminating “patent evergreening” and other “patent thickets,” preventing first-to-file generic drug applicants from inordinately blocking the entrance of subsequent generic drugs and requiring manufacturers to publicly report and explain price increases that exceed certain thresholds.
Opposing Policies Limiting Purchasers’ Ability to Manage Drug Costs
Other stakeholders have proposed policies that would limit the ability of employers and purchasers to manage their drug costs, including banning step therapy and generic substitution. These policies would further drive up health costs for purchasers and families and have no basis in clinical efficacy. EmployersRx will strongly oppose policies that strip employers and purchasers of their already-limited ability to manage their drug costs.
“U.S. prescription drugs represent one of the fastest-growing components of health care costs for employers and its employees for whom they provide coverage. In response to the COVID-19 health crisis, effective vaccines and therapeutic drugs have emerged in a short period of time,” said Lisa Yee, SVEF president and CEO. “Employers are invested in providing quality health and drug coverage and immediate action is necessary to advance policies to keep drugs accessible and affordable for employees and their families.”
About Employers’ Prescription for Affordable Drugs
Collectively, employers are the largest purchaser of health care in the United States, purchasing health care services for more than 153 million people. Employers’ Prescription for Affordable Drugs (EmployersRx) represents public and private employers across the United States that are advocating for reducing prescription drug costs. To learn more about joining EmployersRx in the fight against high prescription drug costs, visit www.EmployersRx.org. Coalition members include:
Purchaser Business Group on Health
PBGH is a nonprofit coalition representing nearly 40 private employers and public entities across the U.S. that collectively spend $100 billion annually purchasing health care services for more than 15 million Americans and their families. PBGH has a 30-year track record of incubating new, disruptive operational programs in partnership with large employers and other health care purchasers that lower health care costs and increase quality across the U.S.
The ERISA Industry Committee
ERIC is a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave, and other benefits to their nationwide workforces. With member companies that are leaders in every sector of the economy, ERIC advocates on the federal, state, and local levels for policies that promote flexibility and uniformity in the administration of their employee benefit plans.
American Benefits Council
The Council is a Washington D.C.-based employee benefits public policy organization that advocates for employers dedicated to the achievement of best-in-class solutions that protect and encourage the health and financial well-being of their workers, retirees and families. Council members include over 220 of the world’s largest corporations and collectively either directly sponsor or support sponsors of health and retirement benefits for virtually all Americans covered by employer-provided plans.
National Alliance of Healthcare Purchaser Coalitions
The National Alliance of Healthcare Purchaser Coalitions (National Alliance) is the only nonprofit, purchaser-led organization with a national and regional structure dedicated to driving health, equity, and healthcare value across the country. Its members represent private and public sector, nonprofit, and Taft-Hartley organizations, and more than 45 million Americans, spending over $300 billion annually on healthcare.
Silicon Valley Employers Forum
The Silicon Valley Employers Forum (SVEF) is a coalition of over 50 high-tech employers that impacts and influences the evolution of global benefits through innovative plan designs, benchmarking, and administration, while leveraging member companies to drive change in the marketplace. We collaborate on projects and partner with vendors and stakeholders, while respecting the culture, philosophy and benefits strategy of member companies.
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