On Friday, February 20, 2026, the National Institute for Public Employee Health Care Policy submitted testimony to the House Committee on Energy and Commerce Subcommittee on Health in response to the February 11, 2026, hearing, Lowering Health Care Costs for All Americans: An Examination of the Prescription Drug Supply Chain. We appreciated the opportunity to share our perspective. Below is a summary of our submission.
As a nonpartisan, nonprofit research organization, the Institute’s mission is to protect the affordability and sustainability of health benefits for public sector employees, retirees, and their families. We provide data-driven, nonpartisan analysis to inform policymakers on issues ranging from prescription drug cost containment to Medicare Advantage and broader health coverage challenges.
Prescription drug affordability remains one of our highest policy priorities.
Key Findings from Our Research
Our 2024 Annual Specialty Drug Survey highlights the mounting fiscal pressures facing public sector health plans:
- Survey respondents reported more than $38 billion in total health care spending.
- Of that, over $13 billion was spent on prescription drugs.
- Nearly $6.5 billion went toward specialty medications.
- From 2022 to 2023, pharmaceutical spending increased by nearly 20%, largely driven by specialty drugs.
- Approximately half of total commercial pharmacy costs are attributable to specialty medications.
These findings underscore a clear trend: specialty drug spending is one of the most significant and fastest-growing cost drivers for public employers.
Specialty Drugs & Market Competition
Public purchasers define specialty drugs as high-cost therapies that often require special handling and typically treat complex, chronic, or rare conditions. While many of these treatments offer important clinical benefits, market competition remains limited.
According to the IQVIA Institute for Human Data Science, only about 10% of biologics losing exclusivity in the next decade currently have biosimilars in development. Without robust biosimilar competition, public purchasers face sustained pricing pressures.
The Institute supports efforts by the U.S. Food and Drug Administration to accelerate biosimilar development and reduce regulatory barriers, and we encourage Congress to advance policies that strengthen competition.
Addressing Patent Barriers
Competition challenges in specialty drugs reflect broader structural concerns within the pharmaceutical patent system. Anti-competitive patent practices can delay generic and biosimilar entry, increasing costs for public purchasers.
Research from Matrix Global Advisors estimates that patent thickets for a single brand-name drug can cost between $1.8 billion and $7.6 billion annually. Addressing practices that suppress competition is essential to lowering prescription drug costs.
Emerging Fiscal Pressures: GLP-1s and Advanced Therapies
Demand for GLP-1 medications is creating unprecedented financial challenges for public sector health plans. Public employers are increasingly confronted with difficult tradeoffs:
- Raising out-of-pocket costs for employees and retirees
- Reducing covered benefits
- Increasing taxpayer burdens
As high-cost therapies, including GLP-1s, cell therapies, and gene therapies, expand, fiscal pressures will intensify. Sustainable pharmaceutical pricing is essential to maintaining comprehensive and affordable benefits for public employees and retirees.
Our Policy Recommendations
The Institute urges policymakers to pursue solutions that:
- Strengthen market competition
- Lower prescription drug costs
- Address patent practices that delay competition
- Preserve strong incentives for medical innovation
- Ensure public sector purchasers are included in federal policy discussions
The Institute remains committed to serving as a trusted, data-driven resource to Congress and federal agencies.
Ensuring affordable prescription drugs is critical to protecting the long-term stability of public employee health benefits and the communities that rely on them.
