State lawmakers across the country are telling patients they’re working to reduce out-of-pocket costs for prescription drugs. However, in response to calls to better serve patients, many states are looking to use an unproven tool that simply is not going to get the job done and could worsen challenges patients face today to access medications.
Billed under names like “Prescription Drug Affordability Board,” legislation that states like Illinois are introducing pulls a bait-and-switch that ultimately threatens equitable access to medications and alters the landscape of health care financing in favor of insurers, not patients.
Ten states across the country have already established a prescription drug affordability board, and Illinois and other states are attempting to follow suit with active proposals to create boards. These proposals consistently establish a state-appointed board to identify drugs deemed “too expensive” for “affordability” reviews. At the core of many of these efforts is a dangerous mechanism to limit reimbursement rates on certain medications — an upper payment limit.
That limit sets a ceiling amount that health care providers and pharmacists can be reimbursed for selected medications. If, for example, the proposed Illinois affordability board set an upper payment limit for a medicine, your insurer could only pay up to a certain amount of what your doctor’s office or pharmacy bills for the medication. It does not change the cost for your doctor’s office or pharmacy to acquire the medication. If the cost to purchase a medicine is higher than the limit, the provider may be forced to decide not to purchase their recommended medication.
Affordability boards that seek to exclusively rely on these reimbursement limits to lower drug prices have yet to demonstrate meaningful cost savings for patients. Despite payment limits threatening the ability of providers to stock and administer critical treatments, nothing in Illinois’ proposed legislation requires any realized “savings” to be passed on to patients or returned to a plan sponsor, such as state public health programs, or employers in the case of employer-sponsored plans.
Setting upper payment limits through the proposed board would only end up hurting providers, limiting their ability to deliver the best drugs to patients for conditions like HIV.
Moreover, state efforts to establish affordability boards could have a ripple effect on the 340B Drug Pricing Program, a federal safety net intended to provide affordable care to low-income and uninsured individuals. Eligible clinics and health care assistance programs receive discounts on medicines through 340B, keeping a greater share of reimbursements from insurers and investing those savings in impoverished communities. If reimbursement rates were to significantly decrease under a payment limit, federally qualified health centers, AIDS drug assistance programs and most hospital systems participating in 340B might not be able to keep their doors open or offer medications at discounted prices.
Some who support affordability boards have testified that 340B purchase prices won’t be affected. This may be true, but the reimbursement rate, where tangible dollars from savings are realized, will be. Setting upper payment limits in Illinois threatens the amount that 340B entities can be reimbursed for treatments, either making the state bridge that funding gap or forcing federally qualified health centers and other providers to move away from serving impoverished communities.
Prescription drug affordability boards simply aren’t the catchy answer some Illinois legislators are being sold on. An upper limit payment is a direct threat to health equity efforts — leaving behind needy families and communities in favor of those who might be able to afford to go out of state or pay cash for a medication.
Policymakers’ goal to tackle barriers to care for patients is right. But if lawmakers in Springfield actually care about helping patients, perhaps starting with patients, rather than any other stakeholders, is the way to go.
Jen Laws is president and CEO of the Community Access National Network, a national nonprofit organization that works to improve access to health care services and supports for people living with HIV/AIDS or viral hepatitis in Illinois and across the country.
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