EmployersRx: Congress Must Reduce Drug Costs for Everyone
Congressional leaders are currently drafting legislation that would allow the federal government to negotiate the price of high-cost drugs and those newly entering the market. Their legislation would also cap price hikes for drugs currently on the market that face no competition.
Unfortunately, some in Congress are considering limiting price protections to just Medicare beneficiaries. This would leave behind all Americans younger than 65 and not yet old enough to qualify for Medicare.
Worse, an analysis by the American Health Policy Institute finds that if drug makers seek to make up for lost revenue due to Medicare price caps, employer sponsored insurance premiums would increase by up to 3.7% per year above their current cost trends if the price protections are not provided to those with private coverage. In just the first five years after Medicare negotiation is implemented, employers, employees and their families would face more than $125 billion in increased drug costs.
Like large majorities of Americans, most business leaders support comprehensive prescription drug reform, as long as price protections apply to private purchasers. According to recent surveys, fully 72% of large business executives support “allowing the federal government to negotiate prices for certain high-cost drugs that have no competitors or setting limits on drug price increases.” Among small business owners, 85% support allowing Medicare to negotiate directly with drug companies on drug prices for seniors and people in private insurance.
The problem of unaffordable drug prices is not limited to just those covered by Medicare. People all over the country, including many covered by private insurance, are unable to afford drug costs. A survey by the West Health Policy Institute and Gallup found that “adults under age 65 are twice as likely as those 65 and over to have been unable to pay for medicine or drugs that a doctor had prescribed because they did not have enough money to pay for them.” The highest proportion of people who report difficulty in affording drugs are aged 50-64, and thus not yet eligible for Medicare.
Unaffordable prescription drug costs impact millions of people, not just Medicare beneficiaries. It is vital that Congress ensure that any legislation to limit prices and price increases apply to the people with private insurance as well as Medicare beneficiaries. America’s employers and health care purchasers cannot be expected to support prescription drug legislation that increases drug costs for the 180 million people covered by private insurance.
EmployersRx coalition members have signed onto a letter to the Senate Committee on Finance Chairman Sen. Ron Wyden to urge him to protect all Americans from ever-rising prescription drug prices.