OBJECTIVES:

Medicare was recently authorized to negotiate certain drug prices with manufacturers, in line with a continued effort to reduce prescription drug costs within the US.¹ On a state level, prescription drug affordability boards (PDABs) have been established, with varying authorities, to reduce drug spending. This analysis aimed to understand the landscape of these PDABs and compare their defined goals.

METHODS:

Targeted searches were conducted in December 2023 to identify PDABs. Data on the purpose, scope, drug eligibility criteria, and affordability review processes were extracted into a prespecified extraction grid. Findings were classified and compared between state PDABs.

RESULTS:

As of January 2024, eight state PDABs have been legally authorized, at various stages of implementation. Identified PDABs fell into two categories: (1) “affordability review,” tasked with identifying and reviewing medicines creating affordability challenges, and when appropriate, setting legally binding upper payment limits (UPLs) for payers; and (2) “strategic,” tasked with recommending spending targets for public purchasers and/or strategies to optimize affordability.

Five states use the “affordability review” PDAB model. Common criteria used to identify review-eligible drugs include a ≥$30,000-60,000 annual wholesale acquisition cost (WAC) or ≥$3,000 annual WAC increase. The number of drugs selected for review annually and the level of external (e.g. patient) input considered in a review varies across PDABs.

Three states have a “strategic” PDAB model. The PDABs in Maine and New Hampshire are authorized to provide detailed spending targets for selected drugs and recommend specific policies to reduce spending overall, while Ohio’s PDAB provides policy suggestions without detailed review of specific drugs.

CONCLUSIONS:

PDABs may reduce drug spending and out-of-pocket costs through recommendations and UPLs. The real-world impact of affordability review versus strategic PDABs requires future assessment once additional recommendations are made.

REFERENCES:

1. CMS (2024). Medicare Drug Price Negotiation. Available at: https://www.cms.gov/inflation-reduction-act-and-medicare/medicare-drug-price-negotiation [Last accessed 10.01.24].