In the coming weeks and months, Congress will tackle momentous decisions in the face of the COVID-19 pandemic.
Working on the twin tracks of fighting the virus and shoring up the economy, policymakers have dozens of tough calls to make. The nation’s employers — as providers of health benefits to more than 180 million Americans — can play a key role in helping foster stability in both the economy and in health care.
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To do so, employers need Congress to move without delay to address the most worrisome strain on employer health budgets: the skyrocketing cost of specialty medicines. The latest data from Express Scripts shows that nearly half (47.7 percent) of all spending on prescription drugs is for specialty drugs — which are, in large part, biologic medicines. In short, employers and their employees need more competition for the highest-cost medicines through the increased availability and use of biosimilar medicines.
Biosimilars are lower-cost versions of biologic medicines that are approved by the Food and Drug Administration for use as an equivalent therapy. A study released in March — the 10th anniversary of the passage of the act that created the approval process for biosimilars — showed that using just one biosimilar treatment in place of its biologic could save individual employers $1.5 million annually.
Across all employers, biosimilars for only two biologics could have saved $1.4 billion in overall employer drug spending. That is significant savings that would positively benefit employer investment and employee expenses in the short and long term.
As prescription drug costs rise, employees are seeing an increased burden of out-of-pocket expenditures for the medications they and their families depend on. Costly specialty drugs will only continue to rise in price; biosimilars are a market-based solution to help lower prescription drug costs for employees and their families.
While new treatments are being considered to take on COVID-19, we also need to drive down the costs of older, more expensive therapies. Right now, only two biologics face the multiple biosimilar competitors that economists say are needed to make an impact on their high costs.
Policymakers face many difficult trade-offs ahead. The good news is that supporting greater biosimilar availability and use does not require these kinds of hard choices.
Both employers and the government have a role to play in realizing greater benefits from biosimilar options. The ERISA Industry Committee has commissioned a compilation of legislative proposals — which number in the dozens — that provide an excellent basis for Congress to act. Federal and state governments can ensure a robust, competitive marketplace for biosimilar medications by considering and adopting pro-competitive policies.
Even in the midst of a national crisis, some things are not changing. Employers still play a vital role in fostering stability in America, and they continue to struggle with the escalating cost of biologic medicines — just like their employees who share in exhorbitant drug costs through premiums, co-pays and co-insurance.
Now is the time for Congress to move without delay to bring relief to struggling employers and address the burden of high-cost specialty medicines. More competition and the increased availability and use of biosimilar medicines are promising market-based solutions to these high costs.
Supporting the uptake of biosimilars is a way to lower costs, increase competition, provide safe and affordable options for patients, and build a more sustainable system for those who pay for health care benefits.
Annette Guarisco Fildes is president and CEO of The ERISA Industry Committee, a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave and other benefits to their nationwide workforces.
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