Scientific Opinion Poll: Small Business Owners Say Drug Prices Are Impacting Their Bottom Lines
Small business owners concerned with rising cost of prescription drugs; believe drug market is in need of reform
Washington, DC—A scientific opinion poll released today shows the vast majority of small business owners who offer health insurance say the cost of prescription drugs is too high, and many feel that drug costs are impacting their bottom line.
The telephone poll, conducted by Lake Research Partners on behalf of Small Business Majority, found 88 percent of small business owners who offer health insurance plans to their employees say drug prices are too high. Additionally, the poll found far more employers think drug companies (72 percent) are responsible for these high prescription drug prices than health insurance companies (20 percent).
This latest polling shows the extent to which the escalating cost of drugs is harming both small business employers and employees. Most small business owners include prescription drug coverage in the plans they offer, and more than half say drug costs are a consideration when selecting a plan. However, these small employers find themselves struggling to afford prescription drug costs and believe that these costs are burdensome to small businesses. In many cases, small business owners are either absorbing these extra costs themselves (31 percent) or passing them on to their employees (39 percent).
“The cost of prescription drugs has been on the rise for some time, and it’s no surprise that small business owners are being burdened by those increasing costs,” said David Chase, Vice President of National Outreach for Small Business Majority. “As these results make clear, our nation’s biggest job creators are finding it difficult to cover the cost of their employees’ medications and strongly support reforming the drug market. Otherwise, they fear they may lose talent to larger corporations with more resources.”
Additionally, the poll found nearly two-thirds (63 percent) of small employers think the prescription drug market is not working at all and is in need of a major overhaul. Small business owners also agree that there is a lack of transparency around the process used to determine prices. More than 8 in 10 agree (83 percent) that drug companies are unfairly profiting off of life-saving drugs.
“The rising cost of prescription drugs affects the quality of insurance plans that small businesses can afford,” said Virginia McAllister, owner of Iron Horse Architects in Denver, Colo. “I’m experiencing this first hand–currently, I’m absorbing these increased costs but I’ll have to consider changing our plan or passing some of these costs to my employees if drug prices continue to rise. I believe we need to enact policy solutions that would help mitigate the damage done to small businesses that absorb the increasing costs of prescription drugs. If we don’t address this problem head on, many small businesses may stop providing health benefits and could lose employees as a result.”
The small business owners surveyed would support a range of policy changes to address rising drug prices. The most popular solution, with 89 percent support, is to make drugs developed at taxpayer expense more affordable. The second-most popular solution at 88 percent is to make it illegal for pharmaceutical companies to pay another company that makes generic drugs to delay the release of those generics.
The survey reflects a telephone interview of 504 small business owners. It has a margin of error of +/- 4.4 percent.
About Small Business Majority
Small Business Majority was founded and is run by small business owners to focus on solving the biggest problems facing small businesses today. Since 2005, we have actively engaged small business owners and policymakers in support of public policy solutions, and have delivered information and resources to entrepreneurs that promote small business growth and drive a strong economy. We regularly engage our network of 50,000 small business owners, along with a formal strategic partnership program of more than 150 business organizations, enabling us to reach more than 500,000 entrepreneurs. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers, including access to capital, taxes, healthcare, retirement, entrepreneurship and workforce development. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.