Prescription drug prices have been a hot topic for years, and while Congress has held hearings and passed legislation in an attempt to reduce drug prices, they remain an issue. Individual states are starting to take matters into their own hands by creating drug price boards and other solutions to help reduce health costs for patients.
States like Colorado, Maryland, and Washington state have established drug price boards with relatively broad powers. Other states like Maine, New Hampshire, Ohio, and Oregon also have boards but those boards are unable to limit drug payments.
Colorado has had its Prescription Drug Affordability Board (PDAB) since 2021. The PDAB is allowed to review prescription drug costs and evaluate their impact on Coloradans as well as recommend ways to address the costs and set an upper payment limit for certain drugs. Recently, however, the state started to roll out a dashboard that will show which drugs are most likely to have price caps, the Colorado PDAB 2023 Eligible Drug Dashboard. The Dashboard includes data from just the first two of four steps of the affordability review process: identify and select/prioritize. This means that a list of all eligible drugs meeting the statutory criteria has been selected and approved by the Board. The Board also selected the drugs for Affordability Review after prioritizing Selection Criteria data results and a prioritized drug list.
Maryland also has a Prescription Drug Affordability Board, established in 2019. Maryland’s Drug Affordability Board has the ability to conduct cost reviews of drugs that seem too expensive, such as a generic drug that has increased in price by 200% over the last year, a generic drug that costs more than $100 per month, or brand-name drugs that launch at a cost of $30,000 per year or more. When conducting the reviews, the Board will consider ten different factors, including available discounts, alternatives to the drug, and cost to health plans. After conducting the review, the Board will make the determination of whether it causes an affordability challenge for patients.
Washington’s PDAB was established in 2022 and has the ability to limit what payers in the state will pay for certain high-cost drugs after an affordability review. This followed the 2019 institution of an all-payer claims database, which should help the PDAB to identify costly drugs that may be considered for an affordability review. The Washington PDAB will focus on brand name drugs costing more than $60,000 a year or with price increases of 15% or more over the past year, or 50% in the past three years. Biosimilars and generics are also included under specific circumstances.
Other Solutions
In a related but different move, years ago, Covered California, the California health insurance exchange, changed the design of health insurance plans to cap policyholders’ monthly copayments for specialty drugs and help curb costs for consumers. Under the change, the majority of Covered California’s policyholders had monthly payments for specialty drugs capped at $250 per month, with caps ranging from $150 to $500 per month.
PhRMA notes that state prescription drug accountability boards put the government between patients and the treatments that their doctors prescribe, “threatening access to treatments and chilling research and development of new medicines as well as “spell[ing] disaster for patients as they could face barriers to obtaining life-saving medication.”