Skip to content

State Panels Decide Whose Drugs Are “Affordable”

Some states are trying to lower health care costs by establishing review boards to assess and limit prescription drug spending. Patient advocates say it may be just another barrier to getting the treatment their health care provider prescribed.  

Prescription Drug Affordability Boards 

Prescription drug affordability boards evaluate the price of medications bought through state-administered health plans. Some set thresholds, known as upper payment limits, for what can be spent on specific medications.  

Affordability review boards exist in nine states as of January 2024. Their influence varies by state, with some boards’ decisions affecting state-regulated plans while others also apply to commercial health plans. Board members are typically selected by state government officials such as the governor, members of the legislature and the insurance commissioner.  

Making the best use of limited health care resources is a laudable goal. But these boards often do not consider patient input with the same weight in comparison to other metrics. 

If restrictions imposed by affordability review boards disrupt treatment, patients can quickly suffer. Whether through additional doctor visits, emergency care or time spent on paperwork, the expense of patient complications can surpass any savings the state hoped to achieve.  

Whose Care Is Worth the Cost? 

Another challenge is how prescription drug affordability boards arrive at their decisions. 

To decide whose care is “worth it” and whose isn’t, some boards use metrics that devalue the patients’ experience or discriminate against certain patient groups.  

One example is the quality-adjusted life year, or QALY, which measures a medication’s value based on how many years of “perfect health” it provides. The approach inherently devalues people with disabilities or chronic illnesses, who may never experience “perfect” health. It also discriminates against older Americans, who have fewer years of life ahead of them.  

Advocates argue that the metric violates the Americans with Disabilities Act, and members of Congress introduced legislation just last year to ban the use of the QALY in federal programs. Yet, at the state level, prescription drug affordability review boards regularly use the metric to make decisions that directly impact patients’ access to care.  

Limited Approach, Broad Impact  

Prescription drug affordability boards can have a broad impact on patient access, yet they often take a narrow approach to the issue of drug affordability. For example, the boards seldom consider the role of pharmacy benefit managers, whose demands for higher and higher rebates create a perverse incentive for pharmaceutical companies to raise list prices on their drugs.  

Prescription drug affordability review boards can also focus solely on costs to the state rather than on costs to the patient, without considering whether blunt cuts to spending will translate into cost savings for patients themselves. 

Cost-saving measures are helpful if savings can be realized without damaging patient care and patient-provider relationships. But reducing costs by blocking patients’ access to treatment, especially based on discriminatory metrics, simply doesn’t work.  

Related Articles