On the Balance Beam: Examining Stakeholder Perspectives in Prescription Drug Affordability Boards
Tor Schliep and Chad Patel
As the world watched athletes gracefully perform on the balance beam in Paris, another balancing act has been unfolding across the United States. Prescription Drug Affordability Boards (PDABs) are facing their own tightrope challenge: harmonizing a diverse array of stakeholder perspectives while striving to make drug pricing more equitable. With eleven boards already established and legislation pending in numerous states, PDABs are tasked with a delicate balancing act, much like the gymnasts on the beam.
PDABs must juggle the interests of various stakeholders, including drug manufacturers, patients, Pharmacy Benefit Managers (PBMs), pharmacists, prescribing physicians, wholesalers, and labor unions. Each group brings its own set of priorities and concerns to the table. So, how do PDABs navigate this complex landscape? How do they “stick the landing” in accommodating such a broad spectrum of viewpoints? In this article, we delve into the perspectives of some of these key stakeholders and explore the challenges PDABs face in achieving equilibrium.
The Patient Perspective
Patient advocates and participants in PDAB proceedings across states voice two primary concerns: the affordability of their medications and maintaining access to their medications.
Patient concerns around drug costs are centered around the financial hardship that they experience when purchasing critical and life-saving medications. In the case of Vertex’s Trikafta, a game-changing treatment for patients living with Cystic Fibrosis, patients testified that although the WAC price is high, they can utilize manufacturer programs that help offset the out-of-pocket costs, and ultimately result in a low burden on their finances. It was largely for this reason that the Colorado PDAB ultimately deemed Trikafta to be “not unaffordable,” despite its WAC price.1 On the contrary, patients largely testified that Amgen’s patient support programs were challenging to navigate, or that they did little to offset the high price of Enbrel. Ultimately, Enbrel was deemed by the Colorado PDAB to be “not affordable.”2
In addition to financial impacts, patients are also concerned about ongoing access to medications and how Upper Payment Limits (UPLs) may impact their access. This concern is particularly apparent around Orphan drugs, where patients may only have one option to turn to for their illness. For this reason, some states are considering prohibiting PDABs from considering products that are marketed for rare diseases.3 However, a general concern remains that manufacturers may withdraw products from specific states if they decide they cannot or will not meet a UPL requirement, thereby impacting patient access to essential treatments.
The Manufacturer Perspective
Pharmaceutical manufacturers are deeply concerned about the impact of UPLs imposed by PDABs. For instance, when Colorado’s PDAB deemed Amgen’s Enbrel to be “not affordable,” Amgen filed a lawsuit claiming that the Colorado law violated federal patent laws and other constitutional protections.4 This response highlights the significant apprehension manufacturers have regarding PDABs.
Manufacturers argue that UPLs can undermine their ability to recover the substantial costs associated with drug development, including research, clinical trials, and regulatory approvals. These financial pressures may force manufacturers to reconsider their investment in new drug development or limit their focus to markets with more favorable pricing conditions.5
Moreover, manufacturers are concerned that UPLs will add complexity to pricing negotiations with various stakeholders, including PBMs and insurers. This can lead to increased administrative challenges and potential pricing inconsistencies.
The Payer Perspective
How UPLs will be implemented and operationalized remains an open question, even in states nearing UPL setting, like Colorado. Payers are keenly interested in the implications of PDAB decisions on their cost structures and negotiations with pharmaceutical manufacturers.
Insurers play a crucial role in negotiating drug prices and managing formularies. They are concerned that UPLs imposed by PDABs might shift financial burdens or alter the negotiating landscape. If a UPL is set lower than the price manufacturers are willing to accept, insurers may face challenges in securing favorable terms or ensuring a stable supply of medications.
Health insurance companies are also invested in how PDABs will affect patient costs and access. Insurers must balance affordability with the need to offer comprehensive coverage, and UPLs could impact their ability to do so. Insurers are skeptical that price savings from UPLs will be passed onto consumers, and note that UPLs would likely result in changes to formulary designs for UPL drugs.6
At AESARA, we recognize the complex and multifaceted nature of the balancing act performed by PDABs.
To date, state efforts to improve drug price transparency and lower overall branding drug spending has occurred via PDABs and UPLs. However, the longer-term impact across benefit design, patient access, pricing, and innovation are unknown and might hinder pricing reform and access in state-regulated commercial markets. Additionally, there is a demonstrated need to incorporate value related elements (eg unmet needs, comparative effectiveness, etc.) into Affordability Review discussions in an organized and consistent manner across drugs selected for Affordability Reviews. Our analysis demonstrates that these elements are being inconsistently applied and analyzed, which risks reducing patient access to important medications because of a lack of due-diligence to understanding value. A strong example that PDABs may refer to in this regard is the Center for Medicare and Medicaid Service’s Drug Price Negotiation Program’s Section I, which allows the ability to provide clinical and value-based evidence that helps CMS understand the value of selected drugs.
Our perspective is rooted in understanding both the intricacies of drug pricing and the broader implications for access and affordability. We recognize that increasing prescription drug prices, in the absence of innovation and evidence, leave patients unable to afford access to critical therapies. However, we also recognize that encouraging innovation through return-on-investment leads to life-changing treatments.
Just as Olympic gymnasts execute intricate routines with precision and balance, PDABs are engaged in their own complex performance, striving to find a balance among competing interests. The diverse perspectives of stakeholders—from patients seeking affordable access to life-saving medications to manufacturers concerned about market dynamics—create a challenging landscape for PDABs to navigate. As PDABs continue to shape drug pricing and access policies, AESARA continues to engage with and monitor PDAB developments to help balance these varied interests to benefit all parties involved.
Reach out to our PDAB experts to discuss PDAB strategies and learn more about our engagement with PDABs.
- Colorado Prescription Drug Affordability Board Final 2024 Affordability Review Summary Report: Trikafta.
- Colorado Prescription Drug Affordability Board Final 2024 Affordability Review Summary Report: Enbrel.
- https://leg.colorado.gov/bills/sb24-060
- https://litigationtracker.law.georgetown.edu/litigation/amgen-inc-et-al-v-colorado-prescription-drug-affordability-review-board-et-al/
- https://phrma.org/Blog/4-truths-about-state-government-price-setting
- Health Plans Predict: Implementing Upper Payment Limits May Alter Formularies And Benefit Design But Won’t Reduce Patient Costs
