Statement of Record for House Committee on
Ways and Means, Subcommittee on Health
February 5, 2020
More Cures for More Patients:
Overcoming Pharmaceutical Barriers
Employers’ Prescription for Affordable for Drugs
Chairman Doggett, Ranking Member Nunes, and members of the House Ways and Means Health Subcommittee, thank you for the opportunity to provide a written statement for today’s hearing on behalf of the Employers’ Prescription for Affordable Drugs (EmployersRx), a coalition of employers united in advocacy to drive down the cost of prescription drugs—one of the biggest challenges in health care.
Drug costs in the United States are at an all-time-high. In the decade preceding 2017, spending on prescription drugs in the U.S. grew from $236 million in 2007 to $333 million in 2017—a 41% increase. The largest contributor to this growth has been the cost of brand name drugs, which have increased by double-digit percentages annually. These elevated prescription drug costs don’t just have an adverse effect on the pocketbook, but patient health as well. Sadly, one in five people forgo filling a prescription due to the sticker shock that comes at the pharmacy.
Employers are collectively the largest purchasers of health care, sponsoring health insurance benefits for more than 181 million Americans, and on average pay 75 percent of costs on behalf of employees, their families, and often retirees as well. We believe that by mobilizing employers to advocate for public policies based on increased competition, transparency, and value, we can help drive down prescription drug costs. EmployersRx is led by the Pacific Business Group on Health (PBGH), The ERISA Industry Committee (ERIC), the National Alliance of Healthcare Purchaser Coalitions (NAHPC), and Silicon Valley Employers Forum (SVEF). Together, these organizations represent thousands of public and private health care purchasers across the United States that together spend more than $100 billion each year sponsoring health insurance benefits for tens of millions of Americans.
Employers want their employees to have access to quality health coverage, including drug coverage, that is affordable for families as well as employers. Prescription drug costs are not the largest cost expenditure for U.S. employers and patients–that dubious honor belongs to hospitals. However, drug costs represent the fastest growing component of health care costs for employers and plan beneficiaries. If the current trends continue, prescription drugs will become the largest expenditure all too soon. Innovation is critical to improving health care, but new drugs must also be efficacious and should be priced based on value. Our current system is unsustainable at all levels, and congressional action is necessary to help address this pressing problem.
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 recent transformational congressional proposals that provide a roadmap to cost-saving, increase competition, create transparency in the drug supply chain, and hold the pharmaceutical industry accountable for unreasonable drug costs and anticompetitive tactics to extend market exclusivity for certain high-cost drugs.
Specifically, we encourage Congress to include following measures in any final drug pricing legislative package that passes into law this year:
- Ensure that patients covered by commercial payers and purchasers have the same protections from high prices and price increases as Medicare patients
- 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
- Eliminate “patent evergreening” and ensure that branded products will face generic competition in line with the rules of Hatch-Waxman
- Reform the PBM industry, including limitations on spread pricing, implementing complete transparency, and requiring the pass-through of all rebates and related fees and payments by PBMs
EmployersRx and its members urge the Committee and Congress to seize the momentum to tackle out-of-control drug prices this year. It is encouraging that lowering drug costs has shown to be a bipartisan, bicameral priority with the support of the White House and pressure from voting constituents.
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.