State legislatures want to chalk up the passage of prescription drug affordability boards (PDABs) as a victory for patients and a political win to address the cry of high drug prices. However, years after many of these boards were established, we’re getting a clearer picture of what these boards are failing to accomplish.
PDABs have wasted millions in taxpayer dollars and threatened access to crucial treatments and the stability of the supply chain — all while delivering zero savings to patients, disincentivizing biomedical innovation, and potentially harming healthy aging. For the sake of patients and taxpayers, state legislators must look elsewhere for solutions that address affordability issues.
Numerous states have established a PDAB, and several more are actively considering, or will consider, bills that establish these boards or expand their authority during 2025 legislative sessions. Years after some of these boards were established, we better understand their costly implementation process, which does not include meaningful public input and is ineffective in reducing patient costs.
Four states are prime examples of the cost of standing up and managing these boards. In Colorado, the PDAB cost taxpayers $700,000 in its first year, totaling $2 million in taxpayer costs to date. The Maryland PDAB has spent more than $3 million since 2019, with substantial continuing expenses — a previous job posting for the board’s executive director listed an annual salary range reaching more than $151,000. Legislation to establish a PDAB in New Jersey appropriated $1.5 million for board expenses, while the Oregon PDAB was appropriated $1.7 million. Collectively, state PDABs have generated zero dollars in patient savings.
The primary tool at PDABs’ disposal is upper payment limits (UPLs), which cap reimbursement rates for specific drugs for pharmacists and clinicians.
Unfortunately, pharmacists and the trade associations representing them continue to tell PDABs that reduced reimbursement rates will affect whether they can carry a drug with a UPL, raising the alarm that the reduction in reimbursement will affect their financial stability and patient access to care, particularly in small communities with limited healthcare resources. Nearly half of healthcare stakeholders in Oregon expressed concerns that UPLs would adversely affect their organizations financially. A survey found that five out of six healthcare payers do not expect patients to directly benefit from UPL-related savings.
Patients, advocates, providers and other stakeholders have voiced concerns about the effects PDABs and UPLs could have on patient access to affordable prescription medications. Many patients feel excluded from board processes due to a lack of representation and limited opportunities for input. Despite this, PDAB members and staff have spent little time investigating these concerns — lending credence to the idea that these boards are not intended to increase access for patients but to check a popular political box.
The implications of establishing PDABs extend beyond direct costs to taxpayers and a lack of patient savings. UPLs often interfere with existing rebates or drug discount programs, leaving patients and their providers with marked-up drug prices. Many of these safety-net programs find value in the margin between reimbursement rates and the cost of medicine after rebates. If a PBAB sets a UPL that limits the amount that can be reimbursed for the purchase of a drug, safety-net providers may only break even or lose money — limiting these programs from supporting patients who rely on them for care. UPLs are a misguided and blunt instrument that will cause systemic harm to the healthcare safety net that serves vulnerable people.
In addition to the millions spent on these boards, taxpayers will almost certainly be asked to backfill the funding losses caused by the financial harms of UPLs. This “solution” will cost more than the problem it fails to solve. These measures threaten healthy aging as patients who rely on these medicines to treat chronic conditions throughout their lives will be worse off than they are now.
PDABs are a failed experiment that does not deserve the attention of state legislatures. Our aging population increasingly faces chronic conditions that require consistent and reliable access to medications. PDABs threaten the availability of these essential treatments by destabilizing pharmacies’ financial viability and discouraging the development of new drugs. Ensuring patients can access their prescribed medications without interruption is critical for their health and well-being.
Rather than implementing or expanding PDABs, lawmakers must, instead, pursue strategies that save people money when they pay for their prescriptions at the pharmacy counter. Banning copay accumulator adjustment programs and increasing regulations around pharmacy benefit managers would represent meaningful progress toward ensuring patients receive the financial relief they deserve. A first step would be for state lawmakers to listen to the patients, caregivers, advocates and other stakeholders telling them that PDABs are not the solution to any of the problems facing our healthcare system.