Employers’ Prescription for Affordable Drugs
Led by PBGH, The Employers’ Prescription for Affordable Drugs, a coalition of The Purchaser Business Group on Health, National Alliance of Healthcare Purchaser Coalitions, The Erisa Industry Committee (ERIC), American Benefits Council and Silicon Valley Employers Forum, supports policies that would require PBMs to make pricing data available to payers and compel drug companies to report and justify price increases for some medications. The coalition also seeks to strengthen competition and remove barriers that stifle the development and use of generic drugs and biosimilars.
The unprecedented achievement of developing safe and effective COVID-19 vaccines in less than a year is a testament to the value of scientific innovation and the critical role that drugs and vaccines can play in saving and improving the lives of millions. Employers and purchasers recognize the extraordinary contribution of biopharmaceutical companies in combating the COVID-19 pandemic and efforts to bring the pandemic to an end. The pandemic and ensuing public health and economic crisis also underscore the need to make prescription drugs more affordable and to spend resources more wisely. Employers’ Prescription for Affordable Drugs (EmployersRx) aims to mobilize large employers to drive down drug costs by educating and influencing public policies. Built on the tenets of transparency, competition, and value, EmployersRx supports public policies that drive down the cost of drugs while preserving true innovation as part of a value-based health care system.
Position on H.R. 3 – the Elijah E. Cummings Lower Drug Costs Now Act
Led by PBGH, the Employers Prescription for Affordable Drugs (EmployersRx) has stated in its 2021 Policy Agenda: “We urge policymakers to allow the federal government to enter into meaningful negotiations on the certain costs of drugs that lack sufficient competition. Negotiated prices must be available to all drug purchasers, not just Medicare. Negotiated prices should align with clinical efficacy, consider the price of the drug in other industrialized countries, and protect true innovation. [Further, we urge policymakers to] cap price inflation on existing drugs. The inflation cap must apply to all payers.”
H.R. 3, as reintroduced in the House of Representatives, includes meaningful negotiation and inflation caps, but the inflation caps policy only applies to Medicare, not private payers. PBGH and the coalition are working closely with Congress to amend this policy, which we believe is critical to the success of the legislation. To date, neither PBGH nor EmployersRx has taken an official position on H.R. 3.
Many drug manufacturers invest a great deal of money in research and development. But those costs and other factors that form the basis for establishing prices are extremely opaque. Increasing transparency at every level of the supply chain will provide consumers, purchasers and other stakeholders the information needed to ensure that effective treatments are obtained at a fair and reasonable cost.
The drug marketplace is characterized by counterproductive incentives, inefficiencies and anti-competitive practices that obstruct healthy price competition. Many newer drugs benefit from government-sanctioned monopolies through patent and market-exclusivity laws. Leveling the playing field by requiring fair business practices would encourage competition and drive down the cost of prescription drugs.
Employers and employees pay more than ever for prescription drugs. But often the price is not aligned with the value of the product. The business models of some prescribing physicians and intermediaries, such as pharmacy benefit managers (PBMs), often are misaligned with the interests of employers and patients, resulting in higher costs. We must stop rewarding payment structures and incentives that result in higher costs, and we must ensure that drugs are priced according to their value as a therapeutic agent.
Of particular concern for health care purchasers are the proliferation of specialty drugs with small markets. While these innovative therapies can be highly effective, their very high costs can be prohibitive for patients and purchasers. EmployersRx looks forward to working with policymakers to identify policies to balance the clinical benefit of specialty drugs with their overall cost to patients and purchasers.
Programs and Initiatives
EmployersRx 2021 Policy AgendaRead More about EmployersRx 2021 Policy Agenda
EmployersRx supports public policies that drive down the cost of drugs while preserving true innovation as part of a value-based health care system.
EmployersRx 2021 Policy Objectives
Policy objectives: Support policies to reduce costs for all purchasers while preserving meaningful innovation.
Employers Support Bipartisan Bill to Increase Drug Price Transparency and Reduce Gaming by Middlemen
Employers’ Prescription for Affordable Drugs (EmployersRx) supports H.R. 5304, the “PBM Transparency and Prescription Drug Costs Act.”