PHAN’s Director of Policy Patrick Keenan gave the following testimony today at a hearing held by the Pennsylvania House Democratic Policy Committee Hearing on the Impact of High Prescription Drug Costs on Pennsylvania:
“Good afternoon and thank you Chairman Bizzarro and Representatives Kinkead, Pashinski, and Fiedler for holding this hearing today. My name is Patrick Keenan, and I am the Policy Director for the Pennsylvania Health Access Network. Our mission is to achieve a day when all Pennsylvanians have affordable, high quality, and equitable healthcare. And we recognize that we are far from that reality at the current moment. Every year, we talk to over 10,000 residents of the commonwealth from roughly 61 or 62 of its 67 counties and assist people with problems including unaffordable medical bills, problems accessing providers, long travel or wait times for care, denials of medically necessary care, and many other similar issues. We also assist people in enrolling in health insurance coverage through our state-based marketplace, Pennie, as well as in public coverage options like Medicaid and the Children’s Health Insurance Program. All of these experiences show us just how much Pennsylvania families, seniors, and small business owners struggle to access healthcare.
To add additional depth to our understanding of the struggles faced by everyday Pennsylvanians, PHAN has worked closely with Altarum’s Healthcare Value Hub to do the first ever survey of healthcare affordability in Pennsylvania with a representative sample, first in 2018 and most recently in 2020. The findings are compelling:
- 1 in 2 Pennsylvania adults experienced a hardship or affordability burden due to the high cost of healthcare in the past year. This number is astounding. There are very few issues that affect half of the adult population in Pennsylvania. Given this prevalence, it is important for lawmakers to focus on healthcare.
- 44% of Pennsylvania adults had needed medical care interrupted by a cost burden in the past 12 months. Again, a significant number of individuals are foregoing care ordered by a doctor because they cannot afford it. This has serious repercussions for an individual’s health and costs us more in the long term when people forego care and end up sicker and requiring more costly forms of care.
- The cost of prescription drugs created one of the largest affordability burdens, causing 1 in 5 of all Pennsylvania adults to cut pills in half, skip does, or not fill a prescription. Prescription medications are often the frontline treatment for preventing or managing serious health conditions. Given the widespread nature of cost barriers, it is critical we think about solutions.
- 51% of all respondents reported being worried about affording prescription drugs. Worry varied significantly by income group, with residents in households making less than $50,000 per year being almost twice as worried as those in households making more than $100,000 per year. This points to a serious health equity issue as well as one that affects seniors on fixed incomes and many hardworking families struggling to make ends meets.
- The rate of people not filling a prescription, cutting pills in half, or skipping doses is nearly twice as great in rural communities (28%) compared to non-rural communities (17%).
- 1 in 4 Pennsylvania adults got the care they needed – including prescription drugs – but struggled to pay the resulting bills. Included in this number is the 8% of Pennsylvania adults who used up all of most of their savings, the 7% who put off payments for basic necessities like food, heat, or housing to afford care, and the 6% of adults who racked up large amounts of credit card debt or borrowed money to pay for care. People should never have to choose between basic needs and medical care, or jeopardize their financial stability to avoid sickness.
Simply put, many Pennsylvania families, seniors, and individuals are on the brink of personal and financial disaster just because they are sick and need care.
The average older Pennsylvanian takes between 4 and 5 brand name prescription drugs regularly. The average annual cost of these drugs is 20% higher than the average senior’s income. For our older adults who have worked hard all of their lives, the uncertainty and worry about not having a prescription drug due to cost is all too real. Many of these adults are faced with the stark realities described in the survey.
Not only are Pennsylvania families hit hard when they go to get care, but often they are losing out on increased wages and further economic growth because of how the high and rapidly rising cost of drugs hits their employers. A recent national survey of small business owners shows that 89% of small business owners think prescription drug costs are too high and 55% of small businesses providing coverage to employees have had to delay growth opportunities because of rising healthcare costs. The survey goes on to detail how small employers are dropping coverage, scaling back on benefits, raising prices, holding off on hiring new employees, or limiting wage growth or increasing employee contributions. Essentially, the backbone of the Pennsylvania economy is buckling under this kind of pressure.
To be fair, healthcare costs in general are rising, not just the cost of prescription drugs. However, prescription drugs account for a significant portion of rising healthcare costs. Estimates from the Commonwealth’s insurance regulator along with national estimates show that prescription drugs make up between 20 and 25% of healthcare spending in Pennsylvania. Often, we see big healthcare entities, including the pharmaceutical industry, point fingers at other entities and push blame onto them. Now is the time to end that blame game. There is no question that pharmaceuticals play a significant role in healthcare and healthcare spending and Pennsylvanians deserve transparency, accountability, and oversight.
Because of these conditions, Pennsylvanians – overwhelmingly and across party lines – want state elected officials to take actions.
- When asked about the top three healthcare priorities the government should work on, at the top of the list (51%) was addressing high healthcare costs, including prescription drugs.
- Of more than 20 options, Pennsylvania adults put drug companies at the top of the list of those who are charging too much money (70% overall, 71% Republicans, 69% Democrats, 69% nonaffiliated).
- Pennsylvanians support a wide array of state-level policy solutions to address prescription drug pricing issues:
- “The government should prohibit drug companies from charging more in the U.S. than abroad.” 89% overall, 91% Republicans, 90% Democrats, 86% nonaffiliated.
- “The government should require drug companies to provide advanced notice of price increases and information to justify those increases.” 89% overall, 87% Republicans, 91% Democrats, 88% nonaffiliated.
- “The government should create a Prescription Drug Affordability Board to examine the evidence and establish acceptable costs for drugs.” 87% overall, 84% Republicans, 92% Democrats, 84% nonaffiliated.
In closing, I want to spend some time examining the Prescription Drug Affordability Board. What Pennsylvanians want to see is lower costs at the pharmacy and this is the only solution that can actually do that and continue to keep other out of pocket costs, like premiums, in check. Not only is it a consumer-friendly solution, but it is one that would actually increase the accessibility of high cost medications, and, in doing so, would likely broaden the profitability of pharmaceutical manufacturers. The board would pursue targeted, precise actions that would correct market failures, ones that no other entity have the possibility of correcting on their own. Those opposed to this limited intervention portray it as “government rate setting” or “socialized medicine” and they talk about it as “unconstitutional.” None of these things are actually true. Three states – Maryland, Maine, and Colorado – are implementing these kinds of boards and dozens of other states are seeking to implement them. This is because these boards are the commonsense solution that citizens are demanding. They are fair and equitable to all parties involved. They deliver the transparency, accountability, and oversight necessary to ensure these vital pharmaceuticals – often developed through significant taxpayer support for research and development – are available to all who need them. Because, as is frequently said, “prescription drugs don’t work if people can’t afford them.”
Thank you again for covering this important topic. I’m happy to take questions and would like to point out that the Prescription Drug Affordability Board is soon to be introduced by Representative Frankel as House Bill 1722. On behalf of those struggling desperately for their medications, I’d ask you to consider supporting this critical legislation, and in doing so, would also help small business owners, local hospitals, county governments, and even taxpayers here in the Commonwealth. Again, I appreciate your time today.”