Health Reform WK-EDGE Employer coalition launches to combat high prescription drug costs
Monday, October 21, 2019

Employer coalition launches to combat high prescription drug costs

By Tulay Turan, JD

The new coalition hopes to put pressure on the government to implement new policies that would increase transparency and competition.

The Pacific Business Group on Health (PBGH), the ERISA Industry Committee (ERIC) and the National Alliance of Healthcare Purchaser Coalitions (National Alliance) have partnered to launch the Employers’ Prescription for Affordable Drugs (EmployersRx), a coalition uniting employers in advocacy for policies that will address our nation’s biggest health care challenge—the high cost of prescription drugs.

"As the largest collective purchaser of health care, businesses have a responsibility to employees and their families to tackle this important issue," said Elizabeth Mitchell, president and CEO of PBGH. "Employers and patients are tired of bearing the brunt of high costs caused by a gamed system set up by drug manufacturers and pharmacy benefit managers. Employers are doing everything they can to contain costs, but this problem is too big to fix without action from the government."

The coalition supports policies that would increase transparency by forcing middlemen, such as pharmacy benefit managers (PBMs), to make pricing data available to payers. Additionally, drug companies would be required to report and justify price increases for some drugs. Furthermore, the coalition supports changes that would strengthen competition by prohibiting practices that stifle the development and use of generic drugs and biosimilars, and increase value by ending secretive PBM schemes, like spread pricing.

Spending on prescription drugs in the United States has skyrocketed, growing from $236 billion in 2007 to $333 billion in 2017—a 41 percent increase. Employers spend 21 cents of every health care dollar on prescription drugs—more than twice the national spending rate on retail drugs. These increases contribute to rising overall insurance rates. Kaiser Family Foundation’s recently released data shows that employer premiums rose five percent from last year to average $20,576.

Funds that could be used by companies to increase employee wages or reinvest in the company are instead being used to underwrite massive profits for drug makers. The Kaiser Family Foundation also released survey results that reported one in four Americans find it difficult to afford medication, and four in five agree that prescription drug costs are unreasonable.

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