Resolution Concerning 12 Years of Data Exclusivity for Biosimilars

The members of PILMA signed the following resolution to establish a regulatory pathway for biosimilars with 12 years of data exclusivity, in order to ensure affordable access to new treatments while encouraging labor job creation for the future.

Click here to view the resolution.

“More medicines are in the development pipeline in America than in the rest of the world combined, nearly 3000”

– Source: U.S. FDA, Office of Orphan Product

Resolution Concerning Strong Intellectual Property Protections in the Trans-Pacific Partnership

The members of PILMA signed the following resolution concerning the need for strong intellectual property provisions in the Trans-Pacific Partnership trade pact in order to promote U.S. innovation and protect U.S. jobs.

Click here to view the resolution.

The pharmaceutical sector, an Intellectual-Property Intensive Industry, is a leader as an economic engine, alone spending more than 10 times the average in research and development expenditures across all sectors.

– PILMA Jobs & Innovation Report

We Work for Health Pennsylvania Vendor Summit

We Work for Health Pennsylvania Vendor Summit

May 16, 2014

GlaxoSmithKline’s WWFH Pennsylvania Vendor Summit at GSK’s union-built Navy Yard facility in Philadelphia brought together Senator Pat Toomey (R-PA) and about 75 business leaders, policy makers and non-profit leaders to discuss the sector’s economic impact and opportunities for growth. The event included a panel discussion featuring former AFL-CIO Pennsylvania President Billy George.

Click here to learn more about the event or view the video below.

PILMA Donates $125,000 to Helmets to Hardhats Program

PILMA Donates $125,000 to Helmets to Hardhats Program

November 15, 2013

The Pharmaceutical Industry Labor-Management Association (PILMA) presented Helmets to Hardhats with a check for $125,000 comprised of donations from pharmaceutical companies Eli Lilly, Johnson & Johnson, Merck, Novartis, and Pfizer during PILMA’s annual meeting on November 15.

Iron Workers President and PILMA Chairman Walter Wise was joined by Building and Construction Trades President Sean McGarvey, as well as representatives from the pharmaceutical industry and labor, to receive the contribution.

“In these tough economic times it is more important than ever that we support our returning troops,” Wise said. “Helmets to Hardhats has a proven track record of placing veterans in good-paying jobs and easing their transition back to civilian life. We are proud to support this program, and we are thankful for the support of the pharmaceutical industry. We look forward to continuing to find ways to grow Helmets to Hardhats in the future.”

Helmets to Hardhats was formed in 2003 to connect retired and transitioning military members with quality career and training opportunities in the building and construction trades industry. Since 2007, when Helmets to Hardhats began tracking placement data, the program has successfully placed almost 6,000 military veterans into careers in the building and construction trades. The program is sponsored by the 15 unions of the building and construction trades along with construction industry employer associations.

Contributions to Helmets to Hardhats support the program’s marketing and outreach efforts, helping veterans around the world discover this opportunity. The actual cost of training participants is covered by the participating unions and their labor-management training funds.

“This program is a win-win for everyone involved,” Johnson & Johnson Vice President for Government Affairs and PILMA Vice-Chairman Don Bohn said. “The pharmaceutical industry is committed to employing a highly-trained and disciplined workforce to construct the complex facilities that help lead us to innovation, and programs like Helmets to Hardhats supply these workers. Hiring veterans who have this training ensures that we are getting the best-qualified workers for the job.”

PILMA is a partnership between companies that form the Pharmaceutical Research and Manufacturers of America (PhRMA) and the unions of the AFL-CIO’s Building and Construction Trades Department. It is PILMA’s mission to help support a strong domestic pharmaceutical industry that provides innovative, affordable medicines to the American people.

“Servicemen and women possess the training and skills to succeed in the building and construction trades, and we are honored to provide an opportunity to help these men and women find success,” President McGarvey said. “This is yet another example of the Building Trades’ commitment, across the U.S. economy, to collaborating with key industries in a way that creates jobs domestically and increases our ability to compete globally.”

Proposed Medicare Part D Prescription Drug Rebates Result in Diminished Multiemployer Plan Benefits

Proposed Medicare Part D Prescription Drug Rebates Result in Diminished Multiemployer Plan Benefits

June 18, 2013

Ironworkers General President and Pharmaceutical Industry Labor-Management Association (PILMA) Chairman Walter Wise released the following statement today following the publication of PILMA’s new study Medicaid Drug Rebates in Medicare Part D Low-Income Subsidy: An Economic Analysis of the Proposed Policy and its Implications for Multiemployer Plans:

“The study released today demonstrates that new government rebates imposed on the Medicare Part D prescription drug program would result in a cost-shifting from government to private payers. This shift would potentially increase health insurance costs and threaten the jobs and health of Americans who draw health coverage from Taft-Hartley multi-employer plans.

The study’s examination of how cost-shifting would be absorbed in the prescription drug market produces empirical evidence that new rebates would severely impact multi-employer plans.

Politicians and officials advocating for new rebates to Medicare Part D plans have been working under the false assumption that the Medicare Part D Low-Income Subsidy (LIS) and non-LIS prescription drug markets function independently. However, PILMA’s study finds that these two markets are inextricably linked. As a result, imposing new rebates would distort the overall prescription drug market and shift costs onto private payers.

This shift would have a devastating effect on multi-employer plans, which may be forced to raise premiums, restrict access to medications, adopt increased cost-sharing measures, or even reduce wages to offset potential cost-shifting.

New rebates to Medicare Part D have already been shown to negatively impact jobs as well. The Battelle Technology Partnership released a report in 2009 that found that any policy change that would reduce industry revenue of the magnitude, such as the proposed Medicare Part D rebates, could eliminate between 130,000 and 260,000 jobs from the biopharmaceutical industry, with many potential cuts affecting unionized construction workers.

Combined with the severe strain additional rebates would put on multi-employer plans, changes to Part D would deal a double blow to the incomes and wellness of our nation’s skilled workers in the building crafts.

In October 2010, the member unions and companies of PILMA warned that potential new rebates to the Medicare Part D prescription drug program would result in cost-shifting. It was clear then, as it is now, that rebates would have a drastic negative impact on Taft-Hartley multi-employer plans and the Americans who rely on these plans for jobs, affordable access to medicines, and chronic disease prevention and treatment. PILMA passed a resolution calling on the President and Congress to protect Medicare Part D and the jobs and benefits it provides.

Earlier this year, I sent letters to the U.S. Senate Budget and Aging Committees, as well as to leaders in both the House and Senate, urging Congress to reject new rebates.

Today that call is reiterated. The biopharmaceutical industry and the workers who rely on the benefits provided by multi-employer plans make significant contributions to our lives every day. Imposing new rebates to Medicare Part D would have a detrimental effect on the world’s best trained workers and their ability to produce the high quality work that drives our economy and benefits the public health.”

To read the full study and executive summary, please click here.

Impact of Medicare Part D Rebates on Multi-employer Plans

Impact of Medicare Part D Rebates on Multi-employer Plans

Click here to view the full report.

Click here to view the executive summary.

Click here to view PILMA Chairman Walter Wise’s statement on the study.

Executive Summary

Medicare Part D is a successful program that has brought prescription drug coverage to millions of seniors, while keeping costs lower than expected with high levels of beneficiary satisfaction. Medicare Part D has also helped multi-employer plans provide benefits to employees at affordable costs. However, economic slowdown and other external factors and trends have created a challenging environment that threatens to destabilize a highly tuned system that unions have come to rely on in providing benefits to their members. Medicare Part D relies on robust competition to negotiate rebates – savings which are retained within the Medicare program and passed on to beneficiaries; implementing a Medicaid-style rebate for Low Income beneficiaries would redirect savings away from beneficiaries and shift costs from the government onto the backs of unionized workers and other privately insured individuals. A Medicaid-style rebate imposed on Medicare Part D plans is a classic example of cost-shifting, which could have severe consequences for multi-employer plans that are already under stress.

Multi-employer Plan Basics

Multi-employer plans were set up under the Taft-Hartley Act of 1947, and are a way of providing benefit security to a unionized workforce through risk pooling and economies of scale. They are particularly useful in trades or industries where the labor force may work for several employers during their career (e.g., construction, transportation, healthcare, mining, communication industries). As beneficiaries of multi-employer plans reach Medicare eligibility, plan Trustees have several options in coordinating prescription drug coverage and Medicare Part D. An overwhelming majority (72%) of multi-employer prescription drug plans rely on the Retiree Drug Subsidy (RDS) to offset costs associated with prescription drug coverage, while still allowing them to provide generous benefits at a reasonable cost to plan participants.

Multi-employer Plans Under Threat

Multi-employer plans have been faced with a number of challenges in recent years. As the annual rate of healthcare expenditures continues to outpace inflation, many plans find themselves digging deep into their plan reserves. This trend is exacerbated by declining fund contributions as a result of the economic slowdown and number of retirees slowly outnumbering active participants. The recent recession also limited the ability of funds to raise income through investment markets.

High Skill Manufacturing Jobs at Risk

“Imposing a mandatory rebate on Medicare Part D plans would have a negative impact on research and development (R&D). In 2009, the biopharmaceutical sector supported 4 million jobs, and is one of the few manufacturing sectors with projected job growth. Studies strongly suggest that price controls – such as mandatory rebates – will reduce R&D investment. Such erosion of investment in this sector puts high skill jobs at risk. Adding to the strain that multi-employer plans already face because of macroeconomic conditions, the federal government achieves cost savings in public health insurance programs at the expense of other payers. A recent report found that commercial health plans were already paying an extra $89 billion in healthcare costs due to federal government underpayments. Thus, there is already a significant amount of cost-shifting being unfairly borne by unionized workers. With multi-employer plans already under strain, the Affordable Care Act (ACA) of 2010 contained several provisions that create significant uncertainty for multi-employer plans. Starting in 2018, a 40 percent excise tax will be imposed for “excess benefits” beyond a $27,500 family threshold. While multi-employer plans generally provide robust benefits, the continuing trend of cost shifting to private payers puts multi-employer plans at further risk of driving premiums above threshold amounts. Additionally, instead of joining a multi-employer plan, smaller employers may encourage their employees to purchase individual insurance through newly created health insurance exchanges. This has the effect of both reducing employer contributions to multi-employer trusts as well as putting unionized workers at a competitive wage disadvantage as cost structures of employers that do not provide benefits may be lower.

Impact on Multi-employer Plans of Imposing a Mandatory Medicare Rebate

In an environment of deficit reduction, some policy makers have proposed imposing a Medicaid-style rebate on drug utilization of Medicare enrollees who receive Part D’s Low-Income Subsidy (LIS). While previously inconclusive, the existing literature base hints that imposing such a rebate on Part D plans will distort the prescription drug market and reduce rebates and discounts available to private payers. Further analysis outlined in a new model definitively shows how such proposals are a classic example of cost-shifting; any potential savings recouped by the government will result in cost shifting to private payers, including multi-employer plans.9 Previous models provided an incomplete picture of the prescription drug market; policy-makers who have proposed imposing a rebate on Part D plans mistakenly believe that the LIS and non-LIS markets function independently. However, more rigorous research shows that these markets are inextricably linked, and can only function independently when demand in the LIS market is perfectly inelastic – a highly unlikely condition. Additionally, economic modeling indicates that as the share of the market subject to a mandatory rebate grows, price distortions become more severe. As manufacturers are already subject to a mandatory rebate in the Medicaid program, dramatically increasing the size of the market that is subject to a rebate – such as imposing a rebate on LIS beneficiaries – will disproportionately squeeze remaining market segments. Because of their unique structure and generous benefits, multi-employer plans will be left with few choices other than to restrict access to medications, increase cost-sharing, and raise premiums in response to the cost-shift that is expected to occur in the face of a mandatory government rebate. Multi-employer plans are also more likely to respond to cost-shifting by increasing patient cost-sharing; this in turn is likely to result in a cascade of other effects, including reduced medication adherence, and ultimately, higher medical costs. Reduced medication adherence may also result in reduced productivity among active union workers, further disadvantaging this workforce. Alternatively, multi-employer plans may elect to offset benefit plan cost increases by reducing wages. In a time of stagnant wages, even a small decline in pay would be significant, particularly as union members have often accepted lower wages in exchange for more comprehensive benefits. New federal requirements for health plans under ACA combined with significant new funding targets for multiemployer defined benefit pension plans are already affecting employers’ ability to remain competitive, thereby reducing income to both the plans and individuals whose wages are already being reduced in response to rising competitive pressures. This proposal will only compound an already untenable situation. As the biopharmaceutical sector supports numerous unionized manufacturing jobs, a Medicare Part D rebate would potentially increase health insurance costs, drive down wages, and cause an already stressed sector to shed additional jobs. In sum, a more rigorous examination of the prescription drug market indicates that any proposal to impose a mandatory rebate on the Medicare Part D program is a classic example of cost shifting; the government will save money on prescription drug insurance for LIS enrollees, but the private sector will pick up much of the tab. In a challenging environment, additional cost shifting would put multi-employer plans at severe risk.