Just a quick scroll through your social media feed, or a spin on your radio dial in the car or remote on your TV - it isn't hard to see that, as a country - we split more now in our beliefs as Americans.
However, drug pricing isn't one of them.
Remember Martin Shkreli? The "Pharma Bro" who starting Turing Pharmaceuticals, purchased the drug Daraprim and overnight raised the price from $13.50 per pill to $750 per pill. A villain pulled directly out of a Victorian crime novel, with a smirk that would later haunt him in sentencing when he was sent to jail for securities fraud, was known as the most hated man in America, by everyone.
Or how about Heather Bresch, the Mylan CEO who took a medication that literally can save a life in a moments notice from $103.50 to $608.61 in 2016. Outraged ensued when Bresch said that Mylan had to raise the price to be able to provide more access to the medication, taking no responsibility for the cost increase. In the end, Mylan ended up pushing out a generic version of the pen that sold for $300. Still almost $200 more than the price in 2016.
In October of 2018, the Centers for Medicare & Medicaid (CMS), administrator, Seema Verma announced that CMS would propose that all pharmaceutical companies publish costs for all medications in television ads.
When you look at the insurance premium as a healthcare dollar, your top 5 costs are broken out as follows:
$0.233 - Prescription Drugs
$0.222 - Doctor Services
$0.202 - Office & Clinical Services
$0.161 - Hospital Stays
$0.047 - Taxes
Prescription drugs account for 23% of your premium costs. That is a burden the consumer, insurer & employer are carrying. A prime example is a recently released Hepatitis C medication - Harvoni by Gilead Sciences - the 12-week regimen costs $94,500. And I can tell you, there is not much negotiation in this cost, I have seen about $90,000 negotiated costs so we are talking approximately 4%.
Congress has been talking about tackling pricing and it seemed as if, everyone was on board to try to tackle an every
growing problem in this country.
Even with all this outrage and data, 2019 has ushered in over 250 price hikes to medications. Just some examples of the increases are:
- Humira (to treat: arthritis, plaque psoriasis, Crohn's disease, and ulcerative colitis.) + 6.2% increase
- Restasis (to treat dry eye) + 9.5% increase
- Tecfidera (for MS) + 6%
- Eliquis (to prevent blood clots) +6%
- Jardiance (Type 2 diabetes) +6%
- Morphine (injectable pain relief) +10%
Note, these increases do not account for rebates or potential patient reimbursement programs. But, remember, we already know that pharmacy costs represent 23% of your insurance premium - so this will have an even higher effect on these costs. These increases are outpacing inflation which was 2.14% in 2017 and projected to be 2.54% in 2018 & 2.44% in 2019.
As a country, getting a handle on these costs will have a positive impact on healthcare in many aspects. We should allow Medicare to negotiate with drug companies, we should push for lower drug pricing - as other countries have it already. In 2018, Jardiance cost $17.33 a pill in the United States but cost $3.33 per pill in Canada - an 81% savings.
Our healthcare reform act, was not a panacea for our healthcare woes, it was reform on the insurance industry. Just one of the numerous reforms we need to put in place to curb costs and provide affordability.
Illness and disease don't care who you voted for or what your party affiliation is.
As we ring in the New Year, gym memberships spike, lines are around the block for salads and resolutions are written down and shared.
As business consultants, we also would like to remind you that the New Year also ushers in new laws for employers of all sizes across New York State.
Some of the most notable are. . . . .
Minimum Wage Increase
Depending on the number of employees and where your business is located in NYS, will decide the rate of minimum wage pay starting January 1, 2019.
Employers in NYC with less than 10 employees: $13.50/hour
Employers in NYC with more than 10 employees: $15.00/hour
Long Island & Westchester: $12.00/hour
Upstate NY and areas outside of NYC, Long Island and Westchester: $11.10/hour
The increase in wages will also affect employer taxes and workers comp insurance, as comp insurance premiums are based on the overall payroll that you report to the carrier.
NY Paid Family Leave Act (Year 2)
As we ring in the New Year 1/1/2019, we also celebrate the first anniversary of the NYS Paid Family Leave (NYPFL) Act. January 1 brings an increase in benefit amounts, duration & premiums.
As a quick reminder: full-time employees who have worked 26 consecutive weeks (credit is NOT given from other employers) and part-time employees (working less than 20 hours a week earning 175 working days) are eligible for NYPFL. Employees should notify their employer 30 days in advance of the leave, when practical.
Paid Family Leave can be used for:
1. Caring for a family member with a serious health condition (physical/psychological)
2. Bonding with the employee's child during the first 12 months of birth, or after placement for adoption or foster care.
3. Leave taken because of any qualifying exigency as defined by the federal Family and Medical Leave Act (FMLA) (when a spouse or domestic partner, child or parent are called to active duty in the military)
4. NEW!: (effective February 3, 2019): to help a family member prepare for, and recover from, surgery related to organ or tissue donation. This is a result of the Living Donor Protection Act signed into law by Governor Cuomo on November 5, 2018.
Who is defined as a family member?
Parent, child, grandparent, grandchild, spouse or domestic partner
Leave can also be taken on an intermittent basis, as approved by the insurance carrier.
What does it cost in 2019 - the cost is 0.153% of an employee's weekly wages up to an annual premium maximum of $107.97. The cost of the premium can be absorbed by the employer or it can be a passthrough paid for by the employee.
NYS has a weekly payroll deduction calendar which can be found HERE
What is the benefit in 2019 - up to 10 weeks of leave; 55% of weekly wages up to a maximum of $746.41 a week. This will continue to step up through 2021 when it will max out at 12 weeks and 67% of the average weekly wage (TBD)
NYS Sexual Harassment Related Protections
In 2018, NYS implemented various updates and changes to the NYS Human Rights Laws to provide greater protections against sexual harassment in the workplace. Expanding the law to cover non-employees (such as contractors, subcontractors, vendors, and consultants).
In October of 2018 - all employers, regardless of size, had to adopt a sexual harassment prevention policy. It also required employers to conspicuously display an anti-sexual harassment rights & responsibility poster.
Effective April 1, 2019 - all employers in NYS are required to provide interactive annual training for all employees. The training requirements can be on site or done with interactive online programs.
A brief overview of some of the NYS and NYC requirements can be found below.
It is important, as you finalize year-end, that you also become familiar with what is coming up on the horizon and are ready to implement. Or, have a consultant, like us, who can help guide you through these changes.
