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Prescription Drug Advisory Boards and Drug Importation—At or Coming to a State Near You?

May 2024, Vol 14, No 5
Dawn Holcombe, MBA, FACMPE, ACHE
Editor-in-Chief
President, DGH Consulting, South Windsor, CT

State legislators have turned their focus to the cost and affordability of healthcare for their purchasers and patients. Determined to reduce drug costs deemed “unaffordable” for patients, one popular strategy has become the legislation and authorization of prescription drug affordability boards (PDABs) that often have the ability to set upper payment limits (UPLs) for specific prescription drugs.1 Since 2019, many states have legislated PDABs, and several more are actively considering doing the same. Each PDAB is employing varying strategies, including reviewing drug prices, implementing price controls, and conducting data and reporting on pricing trends, drug markets, and policy strategies, then offering to implement policy recommendations to improve consumer affordability.2

Where Do PDABs Currently Exist?

On July 1, 2019, Maryland became the first state to create a PDAB (2019 HB768, 2020 HB1100, 2021 HB1034, 2023 HB279). The intent of the PDAB was to study the pharmaceutical delivery and payment process, access data for drug pricing and utilization, and develop regulations that would allow options for Maryland to protect its residents from the high costs of prescription drugs.3 Other PDABs have been legislated or considered in Colorado (2021 SB21-175 and 2023 HB23-1225), Maine (2019 LD 1499 and SB 461), Minnesota (2023 SF 2744), New Hampshire (2020 HB 1280), Oregon (2021 SB844, 2023 SB192), Washington (2022 SB5532), Massachusetts (2020 HB 4000), New York (2017 PHL 280, 2022 SSL 367-a), and Ohio (2019 HB166). PDABs are also under consideration in Connecticut, Michigan, New Jersey, New Mexico, Rhode Island, Vermont, and Virginia.

Colorado Now Setting Upper Payment Limits

Colorado passed legislation in 2021 and 2023 and currently is the only state with a PDAB that has set a UPL for a drug and may do so for up to 12 drugs through 2024, although the legislation itself does not define affordability. After 2024, there is no limit for how many UPLs may be set. When conducting an affordability review, the board may consider prescription drug pricing in foreign countries.

PDABs Are the Legislative Flavor of the Month, but Without a Track Record

This legislation, while it may be well-intentioned, almost entirely neglects individual patient needs for the sake of potential cost savings to the state. PDABs are a hot idea for states to create and enact right now, but there is no actual track record of success or, worse, failure, and regarding health and safety, residents deserve better than their state blindly following other states. PDABs allow government-appointed board members to make critical medical decisions on pricing and access to prescription drugs for a state’s patients—without consulting medical providers or individual patient information. For those with rare or complex diseases like cancer, the impact of PDAB actions could be devastating. The bureaucratic boards will force price-based decisions about which drugs to allow into the state without any medical knowledge of the affected patients.

One popular strategy has become the legislation and authorization of prescription drug affordability boards that often have the ability to set upper payment limits for specific prescription drugs.

Drug Costs and Charges Are Complex, Unique to State Entities and Middlemen

Pricing tables and comparisons built by and for the PDAB analyses are derived from disparate databases, often not even from the state, and with little reflection of the regional market complexity of cost and pricing of drugs. Those with knowledge of the pharmaceutical industry understand that drugs do not follow 1 narrow path from the manufacturer to the patient, and the acquisition cost of the drug along that path does not track consistently beside the payment patterns. Treating providers usually buy the drug themselves and then bill for the drug only after it is administered or dispensed to the patient. The physician or pharmacist rarely has any flexibility in setting the prices that they are paid—those are defined by the health plan, pharmacy benefit manager, or other management entity. Provider acquisition drug costs are also not under their control.

Fighting cancer and other complex medical diseases is hard enough without being told that a stateappointed entity has made decisions for nonmedical reasons that ultimately dictate that the patient’s access to drugs or even physicians has been taken away.

Nonmedical Decision-making by an Economic Board Will Not Serve Patient Needs Well

By focusing on setting arbitrary price limits and restrictions on drugs, which do not recognize the complexity of medical care, drug acquisition costs, and drug billing, legislative proponents run the risk of shutting down access to needed drugs for the very patients they purport to want to help. PDAB legislation could make drugs unaffordable to the pharmacies and physicians that currently provide them, forcing critical healthcare providers to shut down, reducing patient access not just to drugs but to medical care as well.

Advisory boards are not in the business of treating patients. There is no role for an advisory board in medical decision-making, especially one based solely on pricing goals or arbitrary cost limits for medicines for vulnerable patients. Fighting cancer and other complex medical diseases is hard enough without being told that a state-appointed entity has made decisions for nonmedical reasons that ultimately dictate that the patient’s access to drugs or even physicians has been taken away.

Drug Importation: A Grail Fraught With Patient Risk and Unattainable Reality

These proposed PDAB bills often also create a structure and plan for the state to allow drug importation from Canada. This also is an idea that many states are blindly endorsing. No one is actually paying attention to Canada, which has said repeatedly that even if a state manages to create an infrastructure to acquire drugs from Canada, Canada needs its drugs and will not risk the health needs of its population to allow mass exportation to the United States. Health Canada has announced that it does not support actions that could adversely affect the supply of prescription drugs in Canada and potentially raise the costs of prescription drugs for Canadians. That position has been made clear to both federal and state officials in the United States, and Health Canada has released a statement saying, “Bulk importation from Canada will not provide an effective solution to the problem of high drug prices in the U.S.”4

It Is Time to Expose the Drug Importation Quest as an Example of “the Emperor Has No Clothes”

The FDA laid out a pathway through which states could apply for a drug importation program, but it has taken years for even the first state (Florida) to submit a plan for the massive inspection and certification oversight that would be needed for drug importation (which still offers no guarantees that the drugs still will not be risky and have safety issues for affected patients). What no state seems to realize is that the extensive time and money spent to build such a plan and its infrastructure will be useless and wasted. The platform on which the whole idea is predicated (mass importation of drugs from Canada) is a nonstarter from the perspective of Health Canada. Drug importation is a false premise, fraught with safety, quality, handling, and certification risks. Why would any state want to go down that path, least of all waste their time and resources (not to mention credibility with their constituents) when the intended source of drugs—Canada—has no intention of allowing such mass importation.

Although the concern that Governor Lamont and members of the Connecticut General Assembly have regarding the affordability of healthcare and their proposed legislation are well-intentioned, the actual consequences of the creation and actions of any type of PDAB or drug importation will likely have the opposite effect for both patients and those who deliver care to them in Connecticut.

What Can Practices Do?

We now need to connect the dots. If we discover that legislation in our states involves PDABs or drug importation, we need to stand up for our patients. Speak with the bill sponsors or members of the PDAB if it has already been created. Help others understand the issues related to drug access and utilization and the importance to patient continuity of care and whether setting arbitrary UPLs for drug pricing to consumers might affect the ability of a provider or pharmacist to acquire and provide that drug. Speak to the effect on drug prices of middlemen, such as pharmacy benefit managers, alternative funding programs, specialty pharmacies, and 340B programs. Speak to the unintended consequences of nonmedical decision-making comparing one drug with another without knowledge of the patient, drug switching, and the medical, emotional, and financial costs to vulnerable patients when they are presented with reduced access to their needed treatments. Speak to the increased risk of importing drugs from unknown sources; the quality, stability, and temperature control concerns involved with longer transport and delivery times; relabeling from foreign drug labels to labels acceptable in the United States; and the dangers of taking drugs for complex medical conditions when there is no accountability from the state, the foreign importer, the PDAB, or anyone in the drug importation chain.

Bulk importation from Canada will not provide an effective solution to the problem of high drug prices in the U.S.

—Health Canada

Many legislators may not be aware of the implications of these programs vis-à-vis their vulnerable constituents or the complexities involved in what seem to be simple methods by which to reduce drug costs. No one else but us can speak up on behalf of our patients and bring common sense back into this frenzy of legislators blindly following proposals regarding what they think other states are doing, without knowing that these are untested, unproved experiments in cost management that leave our patients in the lurch.

Reach Out

We are our patient’s best advocates when it comes to challenging models such as PDABs and drug importation that make no sense medically or ethically. Share comments with me at This email address is being protected from spambots. You need JavaScript enabled to view it.. I would be interested in hearing what you are seeing as far as the effects of these or similar programs on your own patients.

References

  1. Sikora K. States turn to drug price boards to reduce spending. Avalere Insights. August 15, 2023. Accessed April 24, 2024. https://avalere.com/insights/states-turn-to-drug-price-boards-to-reduce-spending
  2. Aimed Alliance. Enacted prescription drug affordability boards 2019-2023. January 22, 2024. Accessed April 24, 2024. https://aimedalliance.org/wp-content/uploads/2024/01/AA-PDAB-Enacted-Chart-Jan-2024.pdf
  3. Maryland Prescription Drug Affordability Board. Press release, December 28, 2020. Accessed April 24, 2024. https://pdab.maryland.gov/news_archive.html
  4. Health Canada. Statement from Health Canada on FDA decision on Florida bulk drug importation plan. January 8, 2024. Accessed April 24, 2024. www.canada.ca/en/health-canada/news/2024/01/statement-from-health-canada-on-fda-decision-on-florida-bulk-drug-importation-plan.html

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