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Years later, states' drug pricing boards have yet to bring down costs

Five years after the creation of the first state board empowered to cap prescription drug costs, patients still haven't seen any savings from these efforts.

Why it matters: Even as more blue and purple states embrace public drug pricing boards amid angst over high medicine costs, it could still be months or even years before they start to bring down prices.

The big picture: Political roadblocks, pharmaceutical industry pushback and cumbersome regulatory processes have slowed down efforts across the country, insiders said.

  • Colorado's board, launched in 2021, last month became the first to move forward on a payment limit, kicking off a monthslong fight over the blockbuster arthritis drug Enbrel.

  • Maryland's board, authorized in 2019, will soon select drugs for scrutiny for the first time.

  • "It is an entirely fair point" to ask why states are just now beginning to grapple with price caps after years of discussion, said Mark Miller, executive vice president at Arnold Ventures, which funds efforts to create and support affordability boards.

  • But Miller said he's not surprised it's taken so long, given the challenge of setting up a new check on the drug industry.

How it works: Ten states have created drug affordability boards or commissions, while similar legislation has been introduced in more than a dozen states this year.

  • In addition to Colorado and Maryland, boards in Minnesota and Washington state can also set limits on what insurers pay for drugs — a power that advocates say is key to making the boards effective. Some can limit costs for commercial as well as state-backed coverage.

  • Boards in other states, such as New York and Massachusetts, can negotiate better Medicaid rebates, while Ohio's can make recommendations to lawmakers on actions to lower drug costs.

The pharmaceutical industry has strongly opposed these boards, warning they could jeopardize access to certain drugs and charging that they unfairly target drugmakers.

  • "States should be focused on the root cause of the affordability and accessibility problems," said Reid Porter, spokesperson for industry trade group PhRMA. Affordability boards are "set up to fail from the start, some because they're not looking at the entire system."

  • It's also expected that drugmakers will sue to block payment limits boards may set.

  • Patient groups, which often receive drug industry funding, have raised concerns that price ceilings could cut off access to treatments in states that limit payments. Some providers also worry the payment caps could shift additional costs onto hospitals.

State of play: Over the next few months, Colorado's board will consider a price ceiling for Amgen's Enbrel, which it found on average costs more than $46,000 per patient each year.

  • The board could still abandon the process, and it earlier passed on setting a payment limit for a $200,000-per-year cystic fibrosis drug after determining that patients' out-of-pocket costs were usually affordable.

Maryland's board next week will pick eight drugs it will evaluate for affordability.

  • Depending on its findings, the board may craft limits on what the state pays for drugs by the end of the year, said board member Gerard Anderson, a health policy professor at Johns Hopkins University.

  • The process in Maryland is playing out years later than originally planned, partly due to former Gov. Larry Hogan's veto of funding for the board in 2020 and opposition from drugmakers, said Vincent DeMarco, president of advocacy group Maryland Health Care for All.

The bottom line: Future battles in statehouses and courts will decide whether these boards can meaningfully reduce costs, while advocates acknowledge federal action would be far more impactful.


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