Maryland’s Prescription Drug Affordability Board (PDAB) is moving forward with its work to establish upper payment limits for certain prescription drugs it deems to be unaffordable for patients, following some obstacles with the board’s initial creation in 2019. The board is preparing to release and finalize an Upper Payment Limit action plan.
As previously reported by State of Reform, the 2019 legislation that originally established the PDAB—making Maryland the first state in the country to create such a board—was statutorily set to sunset after two years.
Earlier this year, Gov. Wes Moore signed House Bill 279 into law, which re-established PDAB’s authority to set upper payment limits for certain prescription drugs that are purchased and paid for by and through state and local government entities and their plans and programs.
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Andrew York, executive director of PDAB, told State of Reform the board’s upper payment limit methodology is on track to be finalized over the next several months.
“The Upper Payment Limit Action Plan is a document that we need to put together, that would then go before a legislative policy committee … and if they bless it, then it kind of goes into effect, but then we would still publish regulations around it,” York said.
PDAB currently has the authority to set upper payment limits for state and local governments, including state, local, and county-employee health plans, Medicaid, and direct purchases by the state like corrections facilities and state hospitals.
PDAB consists of five members with various healthcare backgrounds. Van T. Mitchell, chair of PDAB, previously served as the Secretary of the Maryland Department of Health; Gerard Anderson is a health policy and management professor at Johns Hopkins University; Joseph Levy, who also works at Johns Hopkins as an assistant scientist; Eberechukwu Onukwugha, who is a professor at the University of Maryland School of Pharmacy; and Stephen Rockower, a retired orthopedic surgeon.
A 26-member PDAB Stakeholder Council—appointed by the president of the Senate, the Speaker of the House, and the governor—provides input to assist the board with decision making.
“The key thing that our report is working through is first, what drugs should be subject to the upper payment limit?”
According to York, PDAB has been discussing how they will approach selecting which drugs to implement limits for and how they will calculate the amount for the upper payment limit since May. Over the past several months, the board has been consulting with stakeholders to inform their methodology for upper payment limits.
York explained that just because a prescription drug is deemed overly costly doesn’t mean an upper payment limit is the best approach to making it more affordable, in which case PDAB might recommend alternative solutions.
The board is using cost-effectiveness analyses, comparative-effectiveness analyses, health technology assessments, and considering factors like a drug’s degree of market competition, its financial return over time, and how much the manufacturer spends on advertising in its development of the upper payment limit plan.
“The board erred away from any kind of normalized formula or specific methodology—they wanted the flexibility to basically look at different prices in different markets,” York said.
PDAB will take other factors into consideration when setting upper payment limits, like how long the drug has been on the market for without competition, return over time, and advertising spent on the drugs.
“We’re working on something called the Supply Chain Report, which outlines all the key issues and drivers of affordability challenges for prescription drugs.”
York said PDAB is hoping to release a drafted version of the Supply Chain Report for the board’s November meeting for them to weigh in on the subject.
“It points fingers at different sectors and supply chains,” York said. “Folks may have qualms with some of the framing of it, but overall, I think everything holds up.”
York said the board is likely to submit the draft of the Supply Chain Report and the Upper Payment Limit Action Plan to the 26-member PDAB stakeholder council for their meeting in December, and expects it to be finalized in January of 2024. Cost reviews are also expected to go live in January, and individuals should expect a three month-long process for the board to weigh in, followed by open deliberation meetings.
“Our hope is that the upper payment process limit is live around that time [summer of 2024],” York said.
For cost reviews, PDAB is setting up ways for Marylanders to notify the board if they’re struggling to afford medications. York said individuals can submit complaints to the board to directly receive and review patient input on how the board selects drugs subject to upper payment limits.
“We’re also working on something called our 211 program, which is basically patient navigation for drug affordability, so a patient just calls us if they can’t afford their drug. That’s a data point for us—that patients are having trouble with this type of drug, and we understand which payers are causing the problem—but then it also allows us to help those patients.”
Under the in-development 211 program, patients will have the opportunity to explore more affordable options, which include checking insurance coverage and looking at patient assistance programs. For the remainder of the year, PDAB and the PDAB stakeholder council will discuss the drafted versions of the plans.