Maryland’s Prescription Drug Affordability Board (PDAB) released its draft action plan for establishing upper payment limits (UPLs) for drugs identified as causing (or likely to cause) affordability shortages. In the draft action plan, the state outlines the process for whether a UPL should be set, and if so, the amount.
The Maryland PDAB is a five-member board, and it confers with a 26-member appointed advisory Stakeholder Council that includes experts across the supply chain and stakeholder representatives. Under Maryland law, if the PDAB finds that a prescription drug product has led to – or will lead to – affordability challenges, it may consider, recommend, and implement policies to address those challenges, including establishing a UPL. However, a UPL may not be warranted in all situations, and in those circumstances, the Board may recommend another policy action, including seeking additional legislative authority to implement a policy solution and providing policy recommendations to the legislature, state and local government partners, and others to address the affordability challenges identified.
The Plan states that the Board shall apply the following criteria when determining whether to set an upper payment limit and when setting an upper payment limit amount:
- The Board shall consider the cost of administering the drug and delivering the drug to consumers, as well as other relevant administrative costs
- The Board shall determine that an upper payment limit is an appropriate tool to address the driver(s) of the affordability challenge identified for the prescription drug product
- The Board shall not set an upper payment limit for the prescription drug product if utilization of the product by Eligible Governmental Entities is minimal
- The Board shall set an upper payment limit in a way to minimize adverse outcomes and minimize the risk of unintended consequences
- The Board shall prioritize drugs that have a high proportion of out-of-pocket costs compared to the net cost of the drug
- The Board shall not set an upper payment limit for generic prescription drug products that have nine (9) or more marketed therapeutic equivalents
Additionally, the guidance notes that UPLs should work to minimize adverse outcomes and risk of unintended consequences. UPLs should also consider government prices, and UPLs should not be lower than the Medicare Maximum Fair Price (if present) and should not impact statutory or regulatory amounts, such as Medicaid best price. UPLs may not be set for a prescription drug product that is on the federal Food and Drug Administration (FDA) prescription drug shortage list and the Board is responsible for monitoring the availability of drugs for which it sets a UPL and if “there becomes a shortage of the prescription drug product in the State, reconsider or suspend the upper payment limit.”
Importantly, it is the preliminary determination that a certain drug has led – or will lead – to affordability challenges that is the predicate for the Board to start the policy review process to study and assess what, if any, policy tools are best suited to redress the identified affordability challenges, including whether a UPL is an appropriate solution for the situation. Within the policy review process, the Board will gather information from various sources (including experts, government entities, and through informational hearings), make preliminary policy recommendations, and potentially achieve ultimate policy approval.