PDABs march on, burning money, while failing to help patients.

The increasing financial burden of healthcare in the United States is not just a political talking point; it is a critical component of everyone's quality of life. Most healthcare spending goes toward items such as hospitals and doctor visits. Prescription drug spending comprises less than 10% of overall national health expenditures, with hospitals and clinical services comprising over 50%. However, the cost of prescription drugs is something all citizens can immediately identify with. More importantly, legislators and other entities identify it as a political quick win or easy fix talking points for the populace, regardless of realistic delivery of relief may be. Hence, the creation of Prescription Drug Affordability Boards (PDABs). A quick win is something that can be achieved with little effort or risk - these are not that. PDABs are rife with risk, have proven to be effort - and resource-intensive, and are far from quick.

Nine states have enacted PDABs, although only seven are currently active. Maryland was the first state to enact a PDAB in 2019. Four states hold upper payment limit (UPL) setting authority while others have review/advisory authority. As level-setting background information on UPLs, please see CANN’s previous discussions of UPLs here. Although PDABs have been consistently marketed as a tool to lower the price of prescription drugs, since 2019 no PDAB has resulted in savings for patients or their states.  Yet, millions of dollars in state funds have been spent on operations in addition to the thousands of hours spent by patients, advocates, and organizations interacting with them. While there has been some productive discourse concerning prescription drug affordability within some PDABs that is not UPL-related, it remains to be seen when or if any savings for anyone will be generated.

One of the most active PDABs has been Colorado. Recently, the board issued the nation's first UPL for Enbrel. However, due to pending litigation with Enbrel’s manufacturer, Amgen, implementation of that upper payment limit is indefinitely on hold. This is due to a preliminary injunction that was issued this year because the UPL, as a price cap, was deemed in violation of federal patent law. More importantly, preliminary injunctions are usually granted only when a judge deems a plaintiff likely to succeed on the overall merits of the lawsuit. The overall lawsuit includes complaints that the Board’s processes and analyses resulting in their decisions have been deeply flawed. Thus, despite multiple years and millions of dollars spent, no savings are foreseeable. However, continued spending is inevitable, including potential legal appeals.

Maryland’s PDAB has also issued UPLs that are not yet implemented. The Board voted to apply UPLs to the drugs Jardiance and Ozempic. However, the UPLs would currently apply only to state and local government health plans. This means the reimbursement caps would apply only to state employees whose health plans already have fixed patient cost sharing that would not be changed. Additionally, the potential for adverse effects on access to care would apply to vulnerable patients in institutions such as prisons or mental health facilities. These are vulnerable populations who are not empowered to advocate for themselves, nor do they have options. Moreover, all state and governmental entities are not required to implement active UPLs until January 1, 2028. The current scope of UPLs in Maryland does not include the commercial insurance market where the majority of Marylanders would be affected. While the Board and staff have indeed mapped out non-UPL solutions to affordability concerns, those solutions have not been pursued with matching effort. They will take longer to implement and require external cooperation. The Maryland Board was the first PDAB enacted, yet it has generated no savings.

One of the most interesting PDABs is Oregon’s. Oregon’s PDAB was enacted in 2021. It does not have the authority to set UPLs; however, it can research and review to recommend UPLs as a policy suggestion to the legislature to pursue. This board has had a pensive evolution, as early on it decided to pause its activities. This was because it realized its operations and manner of affordability reviews and paradigms were not ideal; meaning, the proposed model of imposing a UPL would not achieve the stated goal of saving either the state or patients money. They decided to pause and regroup. As they have continued, they are not perfect but have taken a very patient-centered stance on deliberating drug affordability for Oregonians. Most notably, they decisively voted not to recommend UPLs to their legislature because their analysis showed the tool is ineffective and could significantly harm access.

Colorado, Maryland, and Oregon were highlighted because of their notable activity. Maine and New Jersey’s boards were enacted in 2019 and 2023, respectively. They do not have UPL authority but do have the advisory and review authority to make recommendations. Minnesota and Washington, enacted in 2023 and 2022, respectively, both have UPL authority. However, they are still in development and not close to setting or implementing any UPLs. However, once they finally begin drug reviews, Minnesota is statutorily required to apply a UPL to any drug it deems unaffordable. Stakeholders have also communicated with both boards about concerns with their ongoing deliberations.

With all of this Board activity occurring since 2019, it's obvious that a significant amount of money and time has been spent. That is why it is imperative to look at the data, which shows the factual numbers and associated implications.      

Since they started in 2020, PDABs have spent $28 million trying to figure out how to save patients money. They could have done better by simply disbanding and reinvesting those dollars into public programs, like Medicaid. They’ve held 221 meetings over 394 hours. PDAB members themselves have gone on record saying they feel they haven’t accomplished a thing. Worse, the PDABs are getting more expensive even though they’ve not saved any money. Virginia’s PDAB bill, which the Governor vetoed this year because it seemed too costly without a guarantee of savings, was slated to cost the state $40 million from 2027 to 2031.    

In addition to the large sums of money PDABs have required for operations, the way monies have been accounted for is concerning as well. For example, recently the Office of Legislative Audits found that the Maryland PDAB has $1.4 million in outstanding unpaid fees. Unlike most PDABs, the Maryland PDAB operations are funded entirely through annual fee assessments paid by entities such as PBMs, drug manufacturers and health insurance carriers. The auditors identified that although the PDAB reported collecting $4.6 million between July 2022 and March 2026, $1.4 million of that total is outstanding.

The board response to the audit acknowledged the need to strengthen its fee assessment and weak financial controls while emphasizing that the PDAB is a “small agency managing a labor-intensive collection system involving entities it does not directly regulate”. The PDAB spent approximately $1.06 million in FY 2025, with $755,971 towards salary and wages, $108,645 toward technical and special fees, and $199,831 for other operating expenses. Given the challenges the PDAB is having with its own financial functioning, it raises the question of how it will manage the entirety of its desired UPL implementation and its potentially negative financial and patient access outcomes.

The Maryland Board and staff have not been able to describe the process of imposing a UPL beyond "it'll function like a rebate" (paraphrasing). With the Auditor's stated findings, a reasonable observer would be left to question how effectively the Board would be able to effectuate a UPL and monitor the cash-flow operationally of any UPL. CANN, among others, have repeatedly asked for these specifics to no meaningful answer.

As these PDABs have evolved, they’ve started to abandon patients as well, changing their focus to saving state health plans money instead of patients, a broad departure from how they were originally sold to legislators around the country.

These PDABs have started to abandon patients as well, changing their focus to saving state health plans money instead of patients — a broad departure from how they were originally sold to legislators.

The question of PDABs remains not just one question but many. How much longer will it be before patients or the states see any benefit from PDAB activity? How much multi-dimensional damage will occur as a result of the implementation of any upper payment limits or selective MFP as an UPL proxy? How many other state budget constraints will be worsened instead of improved by resources that are directed toward PDABs instead of other budgetary needs? The bottom line is that patients and other stakeholders need to stay active in communicating with these boards and state legislatures to ensure proper patient-centered decisions are made. PDABs, in the immediate future, are not going away. Thus, it is imperative to stay vigilant and cognizant of their activity to ensure harm is not done.