After months of deliberation, information gathering and public testimony, a state board unanimously agreed Monday that two common medications for type-2 diabetes and other conditions appear to pose an affordability challenge to the state and Marylanders.
The state Prescription Drug Affordability Board approved two resolutions saying that prescription drugs Jardiance and Farxiga likely pose an “an affordability challenge for the state health care system” and the state should look for ways to bring down those costs.
Health care advocates call the long-awaited resolution an “important first step” in the process in bringing down prescription costs for those on the state’s health plan.
Vincent DeMarco, a long-time supporter of the board’s effort and president of the Maryland Health Care for All Coalition, called the preliminary decision a “really big deal.”
In a written statement, the coalition commended board members for agreeing that the “critically-needed diabetes drugs” can cause an affordability challenge for the state, and expressed hope that the board will quickly make decisions to bring those costs down.
The preliminary determination allows the board to consider options for reducing spending on those drugs for the state, including the possible use of upper payment limits to cap how much the state is willing to pay for them.
But it may be a while before the state sees any savings on those medications.
“It’s an important milestone, but it is not a final step,” Andrew York, the board’s executive director, told board members during the public portion of Monday’s meeting.
That milestone has been years in the making. Created in 2019 by the General Assembly, the Prescription Drug Affordability Board was slow to launch due in part to a veto from former Gov. Larry Hogan (R) amid pandemic-induced economic uncertainty in 2020 that delayed the board’s formation.
After Gov. Wes Moore (D) allocated funding for the board’s operation in 2023, the entity went through lengthy rule-making to create the “cost review” process for targeted drugs.
Farxiga, a brand name for the drug dapagliflozin, and Jardiance, a brand name for empagliflozin, are the first drugs to make it all the way through the cost review process, which involves collecting data, industry secrets and public testimony from different parts of the health care system to help the board determine if a drug is unaffordable. Four other drugs will undergo the process later.
Del. Bonnie Cullison (D-Montgomery), who has been involved in PDAB-related legislation for years, said that the work of the board is helping to shed a light on the “black hole” of information on drug costs.
“This board exists because we’re watching the cost of prescription drugs escalate,” she told the board, “and we had to get a handle on that pricing.”
“It’s always been a black hole in terms of how the process works through all of the different components,” she said. “And what this board has accomplished, and the staff of this board has accomplished, is to try to bring light to all of the possible data in this chain, to make a determination whether or not the residents of Maryland are getting the best benefit out of their prescription drugs and what they’re paying for.”
Cullison acknowledged that “it’s been an arduous process, but it was arduous simply because you gave every opportunity to every stakeholder to be engaged in this process.”
PDAB staff members reported that the Farxiga and Jardiance wholesale acquisition costs, which is the manufacturer’s price on a drug when selling to a wholesaler, has risen higher than the rate of inflation, indicating a potential affordability challenge.
The board also cited out-of-pocket costs for consumers and state and local spending on those drugs as indicators that there may be an affordability challenge.
The board will now look at options to address the potential affordability challenge, which could include setting an upper payment limit on those drugs. But it’s not clear when the state will see cost savings.
That said, some members of the health care system and the pharmaceutical industry say that policies such as upper payment limits could weaken access to life-saving drugs. Others say that the board has not engaged enough viewpoints from the health care industry.
“This is a pivotal moment,” Derek Flowers, president of the Value of Care Coalition, said in virtual public testimony. “As the board makes today’s decisions and looks ahead, we urge you to engage clinicians more meaningfully, evaluate real-world consequences of UPLs [upper payment limits], and more importantly, consider non-UPL strategies that lower costs while improving health outcomes.”
Opponents to prescription drug affordability boards also argue that any cost-reduction efforts will likely not result in lower out-of-pocket costs for patients, but rather create savings for the state. But PDAB advocates counter that freeing up taxpayer dollars by reducing spending on prescription drugs could help support other state-led health programs.
Board members also argue that upper payment limits are just one tool among many to potentially bring costs down for the state, and that they are not required to set an upper limit if it would impede access to those drugs.
Maryland lawmakers this year also approved a law that will let the Prescription Drug Affordability Board expand its cost reduction efforts to the commercial, not just the state plan. That expansion only takes effect a year after the board has successfully placed upper payment limits on two drugs.
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