Employers: House and Senate Proposals Move Us Closer to Prescription Drug Cost Relief for Patients and Employers

For Immediate Release

Washington, DC – Employers’ Prescription for Affordable Drugs (Employers Rx) 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 Health Care Costs Act (S. 1895), and other legislation proposed by both parties in the U.S. House of Representatives and Senate aimed at reining in the costs of prescription drugs. Employers Rx 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. U.S. prescription drug costs represent the single fastest growing component of health care 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 health care for 181 million American employees and family members, and pay on average 75 percent of the cost of that care. Innovation is critical to improving health care, 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.

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All media inquiries to The ERISA Industry Committee should be directed to:

Kelly Broadway, 202.627.1918, kbroadway@eric.org

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.