Unsustainably high prescription drug prices threaten Americans’ access to care. In 2023, 28 percent of adults reported difficulty affording their prescription drugs, and 3 in 10 reported not taking their medication as prescribed due to cost. In response, states are pursuing their own innovative reforms to protect patients from high out-of-pocket drug costs.
In the third session of the Center for American Progress’ series on state health care affordability, on June 20, 2024, CAP Health Policy Director Natasha Murphy moderated a discussion with Dr. Andrew York, executive director of the Maryland Prescription Drug Affordability Board; Shabnam Salih, director of the New Jersey Governor’s Office of Health Care Affordability and Transparency; and Dr. Beth Slamowitz, senior policy adviser on pharmacy at the Nevada Department of Health and Human Services. These experts shared insights from their states’ efforts to improve prescription drug affordability by establishing prescription drug affordability boards, implementing drug transparency laws, setting out-of-pocket cost caps, and entering multistate purchasing agreements.
Maryland’s Prescription Drug Affordability Board identifies high-cost drugs and assesses affordability challenges
Maryland established its Prescription Drug Affordability Board (PDAB) in 2019. The Maryland PDAB was the first of its kind in the nation. The PDAB’s five-member board and 26-member stakeholder council work as an independent agency to reduce the financial burden of high-cost prescription drugs on individuals, state and local governments, commercial plans, providers, and pharmacies licensed in Maryland. The PDAB can set upper payment limits for state and local government purchases of prescription drugs, and it provides policy recommendations and annual reports to inform legislative and executive actions on drug affordability issues. This spring, Maryland’s PDAB unanimously selected six drugs for cost review and is currently collecting additional data to determine whether each drug has led or will lead to high out-of-pocket costs for patients or affordability challenges for the state health care system. If so, the drugs could be subject to payment limits in the future.
New Jersey balances immediate relief via out-of-pocket cost caps with longer-term transparency and oversight efforts
New Jersey, home to 14 of the 20 largest drug manufacturers in the country, is known as the “medicine chest to the world” and is taking a comprehensive approach to prescription drug affordability. The state passed legislation in 2023 that built a framework for transparency and accountability. A. 2840/S. 1615 established new detailed reporting requirements across the entire drug supply chain, including for manufacturers, pharmacy benefit managers (PBMs), carriers, and distributors. A. 2841/S. 1616 increased PBM oversight and established a requirement for insurers to use prescription drug rebates to lower premiums or reduce out-of-pocket costs for enrollees. In addition to these market-focused, longer-term efforts, the state is providing its residents with immediate cost relief. A. 2839/S. 1614 mandated out-of-pocket caps for 30-day supplies of insulin ($35), epinephrine auto-injectors ($25), and asthma inhalers ($50) for nearly 2 million New Jerseyans enrolled in state-regulated health plans and public employee health plans. The state also raised income eligibility standards and expanded benefits for older residents and low-income individuals through premium assistance programs and prescription drug programs.
Nevada leverages collective purchasing power through a multistate consortium to reduce prescription drug costs for residents
Nevada policymakers found that uninsured residents and those with high-deductible health plans faced affordability barriers in accessing prescription medication. In 2022, then-Gov. Steve Sisolak (D) joined the Northwest Prescription Drug Consortium, now ArrayRx, to improve affordability by offering a free, digital discount card to all residents. Through the discount card, Nevadans saved more than $1 million, with average savings of $185–$200 per prescription in 2023. ArrayRx offers pharmacy benefit services to the consortium members—Oregon, Washington, Nevada, and Connecticut. By aggregating purchasing power and resources, states can achieve better pricing and more effective drug procurement strategies.
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Federal support enhances states’ drug affordability policies
York, Salih, and Slamowitz agreed that effective federal-state partnerships are critical to advancing prescription drug affordability policy. Federal policy can provide a foundation for data reporting and transparency that state programs can leverage. Additionally, federal scrutiny of PBMs and supply chain transparency issues sheds light on the gaps that states need to fill. By aligning policies and learning from each other’s experiences, federal and state governments can create a more cohesive and effective approach to managing drug costs and improving affordability for consumers.