Read online at the Richmond Times Dispatch here.
Last month, in his State of the Commonwealth address, Gov. Ralph Northam outlined an ambitious plan for health care in Virginia, coupling affordability with achieving real economic impact. As he stated, “When people are healthy, they can work and contribute to our economy. That’s good for everyone.”
Unfortunately, the state legislature has passed two bills that would significantly hinder employers’ ability to contain health care costs on behalf of their employees and undermine Northam’s vision for more affordable, accessible care.
House Bill 1290 and Senate Bill 251 would increase prescription drug costs for individuals across the commonwealth by making it harder for their employers to negotiate discounts with drug manufacturers; to provide more effective, integrated care to their employees; and to encourage use of low-cost generic drugs.
Rising health care costs are a major concern for businesses in Virginia. More than half of the state’s population accesses health care coverage through their employers. Meanwhile, the cost of care and prescription drugs have risen sharply over the past decade. In 2018, Virginia spent nearly $8.5 billion on prescription drugs, with employers bearing the brunt of those outsized costs.
To address this ongoing challenge, many employers have partnered with pharmacy benefit managers (PBMs) who deploy a variety of tools to reduce prescription drug costs and help improve health outcomes. For example, PBMs help negotiate discounts on medications; actively share information with providers that enable them to prescribe the lowest-cost medications for their patients; and administer programs that help patients take their medications as prescribed, leading to improved health outcomes.
A recent analysis shows employers in the commonwealth would save nearly $15 billion over the next 10 years by continuing to use these cost-saving tools. And the state is poised to save more than $25 billion total by using PBMs, when accounting for the public- and private-sector markets combined.
Imposing unnecessary restrictions on PBMs would compromise these savings and have harmful, unintended consequences for businesses and employees.
Other states offer a glimpse into how it would play out. This past year, Oklahoma passed similar legislation despite fierce pushback from major employers across the state. The measure will cost the state at least $7.2 million annually, leading to increased health care costs for both the state, Oklahoma employers and, by extension, consumers and taxpayers.
The two measures headed to Northam’s desk are a lose-lose: they would make it harder for employers to keep costs at bay and result in higher prescription drug costs for hardworking Virginians.
To meaningfully advance his health care goals, we urge Northam to veto both bills and encourage legislators to turn their focus back to developing a solution to address the root cause of this issue: the drug prices set by drug manufacturers.
Debra Barrett is executive director of the Coalition for Affordable Prescription Drugs (CAPD). Contact her at: firstname.lastname@example.org