Senate HELP Legislation Threatens Choices for Plan Sponsors and Patients
Insurance plan sponsors — employers, self-insured plans, and others — work every day to cover the health care needs of hundreds of millions of Americans, including their prescription drug needs. They rely on pharmacy benefit managers (PBMs) to help deliver on those needs in a way that provides affordable access for the unique enrollee and patient populations that they represent, work that is all the more crucial in this era of high drug prices.
This ecosystem that manages prescription drug benefits has worked well for the majority of prescription drugs, delivering overall a low-cost trend by encouraging competition among drug manufacturers and drugstores. But we recognize that there is more work to be done. Too many enrollees and patients face escalating costs due to increasingly high drug prices that are most acute in therapeutic areas where drug companies are blocking competition.
Unfortunately, recently introduced legislation takes an approach that limits plan sponsors’ choices, and could ultimately upend prescription drug benefits in the private marketplace. The bill, the Lower Health Care Costs Act, S. 1895, includes a provision (section 306) that calls for unprecedented government interference into plan sponsors’ ability to choose the health care services that best fits the needs of their enrollees.
Insurance plan sponsors represent a wide variety of health care consumers with diverse clinical needs. Some plan sponsors seek to insulate themselves from drug manufacturers’ pricing variability that could increase the amount they spend on pharmacy benefits and prefer to put that risk on their PBMs. Others prefer contractual arrangements that are more variable and require them to shoulder more risk. Under the proposed legislation, plan sponsors would no longer have a choice. Instead the government would force them into a one-size-fits-all contract.
Our health care system isn’t set up to be one-size-fits-all. Rather, individual businesses, who are best positioned to understand the needs of their enrollees, should have flexibility to design prescription drug benefits that will optimize health care outcomes for everyone.
Certainly, plan sponsors should be fully armed with the information they need to make informed choices when setting up contracts to manage their prescription drug benefits. Transparency is a necessity, and we support transparency that empowers not only plan sponsors, but patients, prescribers, and policymakers, while preserving privacy for individuals. If the HELP Committee is seeking greater transparency, we stand ready to work with them. We need greater transparency throughout the drug supply chain.
We understand that high drug prices are a real issue in the everyday lives of millions of Americans, and we all have a role to play in finding solutions. The Committee has identified the right problem and should be commended for taking it on. The legislation simply represents the wrong “solution.”
From our standpoint, the most effective way to lower prescription drug costs is through increased competition in the marketplace. PBMs are the only entities in the prescription drug supply chain whose primary goal is to lower costs for health plan sponsors and consumers. When real competition exists in the marketplace, drug manufacturers are forced to negotiate, and the result is lower drug costs.
Policymakers should seek to increase competition to lower the costs of prescription drugs, rather than stripping away plan sponsor and employer choice from their health care contracting decisions and handing that authority to the government. We can do better, and look forward to working with Congress to develop solutions that will preserve choices for plan sponsors and the individuals they represent.
