This is part of our Cardinal Way project on promoting civil discussions. This installment consists of this opinion piece that opposes a Prescription Drug Affordability Board and another that is in favor. What’s your experience with drug prices? Do you think this board is a good idea or a bad idea? Tell us what you think by filling out this brief survey.
It was bad policy last year; it’s bad policy now.
Last year, I wrote asking Governor Youngkin to veto legislation that would have created a Prescription Drug Affordability Board (PDAB). This “too good to be true” attempt of a solution only further clouds the process of lowering Virginians’ prescription drug costs. My concern at the time was that the proposed legislation would not change what patients pay for their prescriptions. It was true then; it remains true now.
Unfortunately, this experimental concept is back with a new name, HB 1724, and has all the issues that plagued its predecessor. This legislation, at its core, is a harmful oversimplification of the complex pharmaceutical ecosystem. The underlying misconception is that the patient pays the manufacturer’s list price for a prescription drug. In reality, once the manufacturer sets the price, it goes through a series of price negotiations throughout the supply chain led by middlemen like pharmacy benefit managers (PBMs) before it finally reaches the patient. HB 1724 does not address this broken system; it assumes that lowering a drug’s list price will automatically lower what the patients pay. In fact, price negotiations on brand name drugs resulted in $236 billion in savings for insurers and middlemen in 2021 while patients’ costs continued to rise.
Other states with PDABs in operation showcase this concept’s inability to lower patient prices. Maryland, Oregon and Colorado have already spent more than $10 million on their PDABs and have $0 in patient savings to show for it. If Virginia follows suit, it could result in fewer treatment options for patients and disrupt the ability of physicians to provide essential medications.
Having cared for thousands of Virginia patients, we clearly need measures that reduce families’ financial burdens when paying for their prescription drugs. Unfortunately, PDABs are not the solution. As written, PDABs can only affect the price paid for medications they determine to be “unaffordable,” not what patients pay for these drugs. While the proponents imply that PDABs will lower drug costs for everyone, the reality is that it will take some years for them to decide on a few high-priced ones that target rare, chronic and disabling conditions. Buyer beware!
Fortunately, there are other models for lowering patients’ out-of-pocket costs. One example is Indiana’s “Share the Savings.” This legislation lowers the patient’s cost by requiring that PBMs and insurance companies subtract the rebates they receive from patient premiums. Eighty-five percent of the savings will be shared with patients at the pharmacy counter in the form of lower out-of-pocket costs, and 100% will be shared with employer-sponsored plans to lower employee health costs. Legislators in Virginia should take note of this proven solution that lowers drug costs for patients.
PDABs are unproven, costly experiments with predictable negative consequences. As a physician and patient who is heavily invested in improving the health of the commonwealth, I urge Governor Youngkin to reject this ineffective bill and work with lawmakers to develop real solutions that lower Virginians’ prescription costs.
Harry L. Gewanter, MD, FAAP, MACR is a semi-retired Richmond pediatric rheumatologist and a Board Member of the Coalition of State Rheumatology Organizations (CSRO).