Employers: House and Senate Proposals Move Us Closer to Prescription
Drug Cost Relief for Patients and Employers
WASHINGTON – NOV. 5, 2019 – Employers’ Prescription for Affordable Drugs (EmployersRx) issued this statement in conjunction with the ongoing debate of the Lower Drug Costs Now Act of 2019 (H.R. 3), the Prescription Drug Pricing Reduction Act (S. 2543), the Lower Healthcare Costs Act (S. 1895), and other legislation proposed by both parties in the US House of Representatives and Senate aimed at reining in the costs of prescription drugs. EmployersRx is a coalition made up of the Pacific Business Group on Health, The ERISA Industry Committee, and the National Alliance of Healthcare Purchaser Coalitions.
Employers want their employees to have access to quality health coverage, including drug coverage, which is affordable for families as well as employers. US prescription drug costs represent the single fastest growing component of healthcare costs for employers and the workers for whom they provide coverage. Brand drug costs have increased by double digits annually for much of the past decade and much of the burden is falling on the employers who purchase healthcare for 181 million American employees and family members and pay on average 75% of the cost of that care. Innovation is critical to improving healthcare, but new drugs must also be efficacious and provide overall value. Our current system is unsustainable at all levels, and Congressional action is necessary to help address this pressing problem. Policymakers across the political spectrum want to lower drug costs, so the time to act is now.
We strongly believe that healthy, functioning, competitive markets can drive lower prices and improved value. But we also recognize that markets sometimes fail, or don’t even exist, and in those cases government intervention is needed. In this spirit, we applaud leaders in the House and Senate for drafting cost-saving, transformational proposals that increase competition, create transparency in the drug supply chain, and hold the pharmaceutical industry accountable for unreasonable drug costs and anticompetitive product life-cycle management.
H.R. 3, for example, puts forward several policy proposals that, if constructed in a balanced and market-driven manner, could result in lower drug costs for employers and consumers. We are intrigued by aspects of H.R. 3, including:
- A carefully targeted policy that allows meaningful negotiations on the costs of drugs that lack sufficient competition
- The ability of commercial payers and purchasers to take advantage of these negotiated prices, in order to protect patients in employer-based plans from “cost-shifting” efforts to make up perceived revenue losses
In any scenario, it is essential that Congress include robust safeguards to ensure that employers and consumers do not experience cost increases by manufacturers due to changes in the Medicare program.
Both H.R. 3 and S. 2543 include policies to prevent drug prices from growing faster than the economy or patients’ ability to pay. These proposals appear critical to garnering sufficient bipartisan support to pass legislation and send it to the President for signature. As with price negotiation, however, it is essential to protect commercial payers, purchasers and consumers in the commercial market from any cost-shifting due to changes in Medicare drug policy.
We also believe that additional steps are needed to strengthen market forces for prescription drugs, and we encourage Congress to include in final prescription drug cost legislation this year ALL of the following measures proposed by the Senate Health, Education, Labor and Pensions (HELP), Finance, and Judiciary Committees, as well as the House Ways and Means and Energy and Commerce Committees:
- Prevent first-to-file generic drug applicants from blocking, beyond a 180-day exclusivity period, the entrance of subsequent generic drugs to the market
- Enable generic manufacturers to counteract the wrongful delays of generic and biosimilar drugs
- Reduce citizens petition abuse by giving the FDA additional guidance on denying petitions submitted for the purpose of delaying generic approval
- Require drug manufacturers to publicly report and justify egregious price increases
- Require branded biologic companies to publicly list, in an online database, drug patents they can reasonably defend
- Eliminate “patent evergreening” and ensure that branded products will face generic competition in line with the rules of Hatch-Waxman
- Prohibit spread pricing by PBMs, and require complete transparency and the pass through of all rebates and related fees and payments by PBMs
As legislation is advanced through both chambers of Congress, EmployersRx will continue to engage policymakers to provide feedback and direction from the employer purchaser perspective. Our goal is a bipartisan solution that advances our core principles: transparency, competition, and value, which result in lower drug costs for all.
EmployersRx and its members urge the House, Senate, and Executive branch to seize the momentum to tackle out-of-control drug prices this year. The only mistake is not to act at all. We will continue to urge policymakers toward a path of actionable solutions for patients, families, employers, and all Americans who feel the brunt of high prescription drug costs.
About Employers’ Prescription for Affordable Drugs
Collectively, employers are the largest purchaser of healthcare in the United States, purchasing healthcare 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.
About The ERISA Industry Committee
ERIC helps America’s largest employers stay ahead of employee benefit policy. ERIC member companies are leaders in every sector of the economy, and we represent them in their capacity as sponsors of employee benefit plans for their own workforce. Only ERIC provides the combination of intel, expertise, collaboration, and lobbying that exclusively serves the interests of large employers who provide health, retirement, and compensation benefits to their nationwide workforce.
About Pacific Business Group on Health
Pacific Business Group on Health is an action-oriented 501c(3) non-profit organization focused on improving health outcomes, experience and affordability for consumers and purchasers across the United States. Since 1989, PBGH has distinguished itself as a national innovator driven by some of the largest and most influential public and private purchasers of healthcare in the country, including Boeing, CalPERS, Comcast, Intel and Walmart. PBGH leverages purchaser action in partnership with providers, payers and policymakers to identify, test and scale innovative models for improving health outcomes and affordability.
About National Alliance of Healthcare Purchaser Coalitions
The National Alliance of Healthcare Purchaser Coalitions is the only nonprofit, purchaser-led organization with a national and regional structure dedicated to driving health and healthcare value across the country. Our members represent more than 12,000 employers/purchasers and 45 million Americans spending over $300 billion annually on healthcare.
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