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07/01/2024 | Press release | Distributed by Public on 07/01/2024 08:18

What Are Prescription Drug Affordability Boards, and Can They Save Me Money

Key takeaways:

  • Prescription drug affordability boards (PDABs) have been created in 11 states to address the high cost of medications.

  • Some PDABs can set upper payment limits. These can cap what the state and other entities pay for prescription medications. They can also help consumers with out-of-pocket costs.

  • Only Colorado's PDAB has set an upper payment limit. But it has not determined a price for the selected medication. The board found that the biologic Enbrel was unaffordable for consumers. Drugmaker Amgen has a pending lawsuit.

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The U.S. has the highest prescription medication prices in the world. About 1 in 3 U.S. adults say they are not taking medication as prescribed because of cost. One solution is a prescription drug affordability board, or PDAB. These organizations exist in 11 states.

A few PDABs can cap prices or the amount insurance plans or state programs, such as Medicaid, pay for prescription medications. This action may result in lower out-of-pocket costs for consumers.

The first PDAB was authorized in Maryland in 2019. So far, none of these entities has reduced the price of a prescription medication. But they have provided consumers with savings.

What is a prescription drug affordability board (PDAB)?

A prescription drug affordability board aims to reduce the cost of medications. Target populations include:

  • All state consumers

  • Hospitals and healthcare systems

  • Public health insurance plans, including federal plans operating in the state

  • State agencies that buy pharmaceutical products, such as Medicaid programs

The structure and operation of each board varies. The organizations can be a board, a council, or a commission. Some states have a board with an advisory council.

The work of PDABs can expand on federal efforts or open the door to new ways to make prescriptions affordable. And in reducing what consumers pay out of pocket, PDABs can help you avoid or reduce medical debt.

PDABs may seek to lower prescription medication prices by:

  • Evaluating affordability

  • Organizing group consortiums, which offer prescription discount cards

  • Limiting out-of-pocket costs for consumers of specific medications

  • Making recommendations to state legislatures about how to reduce costs

  • Advocating Medicaid supplemental rebates

  • Negotiating prices

  • Setting upper payment limits (UPLs), which cap payments for specific medications

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  • Prescriptions you can't afford are meds you don't take: People in the U.S. are skipping doses, delaying refills, and taking on medical debt to pay for prescriptions.

  • Making prescriptions affordable: You may be able to save on medications with patient assistance programs, manufacturer copay cards and other discounts, or cost-reduction strategies such as step therapy.

  • People with Medicare Part D are getting relief: Starting in 2025, Medicare Part D enrollees will have a $2,000 out-of-pocket limit and access to payment plans for their share of prescription costs.

Which states have prescription drug affordability boards?

Here are the 11 states that have PDABs (as of publication time). Some have upper payment limits on medications and affect only part of the population.

State and board name

Can the board set upper payment limits on medications?

Population affected

Colorado Prescription Drug Affordability Review Board & Advisory Council

Yes

All consumers in the state, except for those enrolled in self-funded plans that don't participate

Maine Prescription Drug Affordability Board

No

Public plan enrollees

Maryland Prescription Drug Affordability Board

Yes, pending additional legislative approval

Public plan enrollees, but may expand to all payers

Massachusetts Health Policy Commission

No

Medicaid enrollees

Minnesota Prescription Drug Affordability Board

Yes

All consumers in the state, except plans preempted by the Employee Retirement Income Security Act, which don't participate

New Hampshire Prescription Drug Affordability Board

No

Public plan enrollees

New Jersey Drug Affordability Council

No

All state consumers

New York Drug Utilization Review board

No

Medicaid enrollees

Ohio Prescription Drug Transparency and Affordability Advisory Council

No

State entities and all state consumers

Oregon Prescription Drug Affordability Board

No

Oregon residents and healthcare systems

Washington Prescription Drug Affordability Board

Yes

All state consumers

States with pending legislation for PDABs

According to the LexisNexis State Net legislative tracking system, another 12 states had pending legislation to create PDABs as of March 2024:

  • Arizona

  • Connecticut

  • Iowa

  • Kentucky

  • Michigan

  • Nebraska

  • Pennsylvania

  • South Carolina

  • Vermont

  • Virginia

  • West Virginia

  • Wisconsin

How do prescription drug affordability boards work?

PDABs have different processes for determining whether a medication's price is too high for consumers and insurance plans.

Here's one example: In February 2024, Colorado became the first state to set a price cap. The action involved Amgen's Enbrel, a biologic that treats psoriasis, arthritis, and other conditions. The board has 6 months to determine a UPL. Amgen sued, alleging that the board's effort to set prices is unconstitutional.

Enbrel costs $46,000 a year without insurance or discounts. The Colorado PDAB found that, on average, state consumers paid $2,295 annually out of pocket for the medication if they had commercial insurance or Medicare Advantage. The Colorado All Payer Claims Database showed that, on average, consumers taking Enbrel spent nearly $9,000 annually in out-of-pocket costs.

In 2023, however, the Colorado PDAB did not set a price cap on Trikafta. The drug has a list price of more than $300,000 before discounts, such as the manufacturer's financial assistance program. The board decided that the cystic fibrosis medication was not unaffordable for consumers.

What do prescription drug affordability boards mean for the cost of my medications?

It depends. A PDAB action may lower your copays or coinsurance. You may pay less out of pocket if your state's PDAB enacts other savings strategies.

It's important to note that PDABs have had mixed results so far. These efforts are not embraced by everyone. Some advocates say that price caps jeopardize the availability of medications. The work of PDABs has been slowed by political roadblocks. These include opposition from pharmaceutical companies and pharmacy groups, as well as regulatory and legislative issues.

Sometimes a PDAB can't even get the requisite number of appointees to begin working. New Jersey established its drug affordability council in July 2023, but the first appointments weren't made until March 2024.

Frequently asked questions

What other actions are states taking to reduce prescription costs?
expand_more

In January 2024, Florida became the first state authorized by the FDA to import less costly prescription medications from Canada. Eight other states had applications pending as of January 2024.

What is the federal government doing about high prescription prices?
expand_more

With the Inflation Reduction Act of 2022, the federal government capped out-of-pocket Medicare costs for insulin at $35. In 2025, Medicare Part D will cap out-of-pocket prescription costs at $2,000 per year.

Enbrel - the medication that Colorado deemed unaffordable - is among the first 10 medications on Medicare's price negotiation list. Lower prices in that program are expected to take effect in 2026.

How many state legislatures are considering prescription affordability measures in 2024?
expand_more

Eighteen states were considering or had considered prescription affordability measures in 2024, at publication time, according to the National Academy for State Health Policy. Some of the legislation has failed.

The organization maintains a list of state laws since 2017 that address healthcare affordability.

The bottom line

Since 2019, several states have created prescription drug affordability boards (PDABs). They are authorized to address the high cost of medications. Other states are considering establishing them. Some PDABs can set an upper payment limit, which is the most that can be charged for a prescription medication. These measures aim to bring savings to consumers and insurance plans, including Medicaid programs. So far, no PDAB has succeeded in capping a prescription's price. The federal government has taken other steps, such as capping out-of-pocket prescription costs for Medicare enrollees. One state, Florida, has secured FDA approval to buy lower-cost medications in Canada.

References

Alinsky, J. (2024). Colorado prescription drug affordability board says: Pharma, the price is wrong. Arnold Ventures.

Amgen Inc. et al. v. Colorado Prescription Drug Affordability Review Board et al. (2024). Docket no. 1:24-cv-00810. U. S. District Court for the District of Colorado.

View All References (25)
expand_more

Boyd, S. (2023). Patients and doctors worry "miracle" drug Trikafta may no longer be available in Colorado amid possible price-cap. CBS News.

Colorado Department of Regulatory Agencies. (2024). Colorado prescription drug affordability review board & advisory council.

Colorado 74th General Assembly. (2023). HB23-1225: Extend and modify prescription drug affordability board.

Commonwealth of Massachusetts. (n.d.). Massachusetts health policy commission.

Ersland, S. (2024). Colorado PDAB to pursue price ceiling for Enbrel. State of Reform.

Frank, J. (2023). Colorado struggles to cut drugs costs as imports and price caps stall. Axios Denver.

Hughes, S., et al. (2023). Following the money: Untangling U.S. prescription drug financing. Center for American Progress.

Hulac, B. J., et al. (2024). Why lower prescription drug prices may come later rather than sooner. NJ Spotlight News.

InsiderNJ. (2024). NJCA praises Murphy appointees for Drug Affordability Council, urges action on further appointees.

Janssen Pharmaceuticals. (2024). Influence of prescription drug affordability boards and upper payment limits on the state drug pricing ecosystem.

Joseph, B. (2024). Potentially big year for prescription drug affordability boards. LexisNexis.

Maryland General Assembly. (2019). House bill 768.

Minnesota Commerce Department. (2024). Minnesota's prescription drug affordability board.

Minnesota 93rd Legislature. (2023). S.F.No. 2744.

National Academy for State Health Policy. (2024). State laws passed to lower prescription drug costs: 2017-2024.

National Academy for State Health Policy. (2024). 2024 state legislation to lower prescription drug costs.

National Alliance of State Pharmacy Associations. (2024). Prescription drug affordability boards: Risks to pharmacy reimbursement.

New Hampshire Department of Health & Human Services. (2024). New Hampshire prescription drug affordability board.

New York State Department of Health. (2024). Drug utilization review (DUR).

Ohio House Bill 110 - 134th General Assembly. (2021). Section 125.95 | Prescription drug transparency and affordability advisory council.

State of New Jersey. (2023). Governor Murphy signs legislative package to make prescription drugs more affordable for New Jerseyans.

U.S. Food and Drug Administration. (2024). FDA authorizes Florida's drug importation program.

U.S. Food and Drug Administration. (2024). Importation program under section 804 of the FD&C Act.

Washington State Health Care Authority. (2024). Prescription drug affordability board.

Wilson, S. (2023). New Colorado board opts against price controls for high-cost cystic fibrosis drug. Colorado Newsline.

GoodRx Health has strict sourcing policies and relies on primary sources such as medical organizations, governmental agencies, academic institutions, and peer-reviewed scientific journals. Learn more about how we ensure our content is accurate, thorough, and unbiased by reading our editorial guidelines.

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