First things first: What is a Prescription Drug Affordability Board (PDAB)? As the nonpartisan National Conference of State Legislatures (NCSL) describes them in a 2022 article, “These nongovernmental agencies are tasked with identifying drugs with the highest cost and the highest usage in the state and looking for ways to reduce state spending.” If you’re managing a chronic disease, health care costs are something you worry about every single day, and medication is definitely one of those concerns.
Typically, PDABs will release a list of specific drugs that they’ll focus on understanding. Some PDABs can impose “upper payment limits” which means controlling the price of certain treatments.
So, it should be a good thing that states are starting to pay attention and bring all stakeholders (patients, manufacturers, insurance, researchers, etc.) to one table and try and hammer out a solution, right? It all sounds pretty good on paper.
But the answer is a little more complicated and it depends on a variety of factors. What are their rules for allowing patients to testify, and do they take patient recommendations into account? Does the PDAB have the power to impose price limits on specific drugs? How do they select the drugs that they’ll evaluate? Are they looking at the manufacturers’ list price, or what most patients pay at the counter? What about impacts to Medicaid pricing? Do the legislators or other citizens on the PDAB have any knowledge of drug development, distribution, pricing, accessibility? If a PDAB caps the cost of a drug, do the savings get passed on to the consumer? Will the manufacturer continue to make the drug, if the PDAB’s price is too low? What happens to a patient if there is no similar drug on the market?
We have a lot of questions for PDABs, and you should too. The bottom line is that drug costs are highly complicated, and PDABs tend to take an oversimplified approach. Patients need to keep an eye on these entities, as the decisions they make will have direct impacts on Americans living with chronic disease.
For those states this year — like Illinois and Arizona — that are considering the creation of PDAB, the CDC requests that legislators keep the following things in mind:
- Exclude orphan drugs from the list of treatments to consider. The US Orphan Drug Act of 1984 defines these medications as “efficient against a disease affecting fewer than 200, 000 people... or one that... will not be profitable for seven years.” Rare disease patients rely on the availability of these drugs, and if a company cannot make a sufficient profit due to price controls, they could stop developing the treatment.
- Don’t use the QALY method. The “quality-adjusted life year” metric determines a medications value based on the number of years of “perfect health” it could provide. This devalues chronic patients that live with diseases and have valuable lives even without “perfect health.” This standard also discriminates against older Americans who are able to add years to their lives with the benefit of good treatments.
- Avoid arbitrary upper payment limits. All new disease treatments — for diseases known and unknown — come from the private sector. Upper payment limits may score some immediate, short-term wins, but in the long run, may make it harder for companies to explore and develop new treatments. The next generation of patients deserves the next generation of treatments.
- Seek out patient input — and act on it. The actual patient experience can get lost in academic conversations about how much a volunteer board thinks a medication should cost. The patient experience of costs can be very different than a “list price” might indicate. So, is a PDAB trying to hold down costs for an insurance company or a patient? Keep patients at the table and continuously seek patient input.
While much remains to be seen about the efficacy of PDABs in lowering health care costs, the CDC is also laser-focused on pushing policies that have direct impact on patients: Copay accumulator bans, step therapy reform, Medigap expansion, PBM transparency and mandated rebate pass-throughs, to name a few.
We do extend our gratitude to all PDAB members that serve with the shared goal of lowering health care costs. At the CDC, we’re willing to work with anyone to make that happen. We just can’t lose sight of what really helps patients.