EmployersRx 2021 Policy Agenda

Support Policies to Reduce Costs for All Purchasers While Preserving Meaningful Innovation

Policymakers are considering a set of policies that use the Federal Government’s purchasing power to meaningfully reduce drug prices for beneficiaries and taxpayers. To ensure that these policies do not result in cost shifting to private payers, and to provide direct relief to families covered by private insurance, it is essential that any policies to directly manage drug prices extend to all payers, not just public programs. To that end, 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.
• Cap price inflation on existing drugs. The inflation cap must apply to all payers.
• Modify Medicare Part B to eliminate the incentive for providers to prescribe higher cost drugs.

Support Policies to Strengthen Competition and Enhance Transparency

Policymakers can take steps to indirectly reduce the cost of drugs by banning anticompetitive practices by drug makers and other actors, and enhancing price transparency. To that end, we urge policymakers to:

• Eliminate “patent evergreening” and other “patent thickets” to ensure that branded products will face competition from generic drugs and biosimilars in line with the intent of current laws.
• Prevent first-to-file generic drug applicants from blocking, beyond a 180-day exclusivity period, the entrance of subsequent generic drugs to the market.
• 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 explain price increases that exceed certain thresholds.
• Require branded biologic companies to publicly list drug patents they can reasonably defend.
• Require health care providers and pharmacies to include National Drug Codes (NDC) in claims for commercial health plans. NDC codes are currently required for claims to public payers (Medicare and Medicaid) and provide greater transparency on prices to purchasers.
• Require complete transparency by pharmacy benefit managers and the pass through of all rebates and related fees and payments to plan sponsors.
• Address spread pricing by pharmacy benefit managers, health plans, providers, and other intermediaries. Purhasers should be given the option to accept or reject spread pricing. This policy should apply to drugs administered directly by providers and sold in the pharmacy setting.

Oppose Policies Limiting Purchasers’ Ability to Manage Drug Costs

Other stakeholders have proposed policies that would limit the ability of employers and purchasers to manage their drug costs including banning step therapy and generic substitution. These policies would further drive up health costs for purchasers and families, and have no basis in clinical efficacy. EmployersRx will strongly oppose these policies which strip employers and purchasers of their already limited ability to manage their drug costs