Maryland's drug affordability board is a step closer to setting prescription caps

A Maryland drug affordability board can move forward with a plan to cap how much the state and local governments pay for certain high-cost prescription drugs after it was given the green light by a state House Committee.

The Maryland Prescription Drug Affordability Board -- which drafted the Upper Payment Limit Action Plan -- presented before the Legislative Policy Committee on Tuesday morning, saying caps will help increase affordability and increase access.

"Upper payment limits are one tool in a larger process looking at how to make prescription drugs more affordable for Marylanders," Dr. Andrew York, executive director of the board, said during a presentation at the meeting. "We look at it as one of the tools in the toolbox."

York said the board would need approval from the committee on the plan so that the members can begin setting upper payment limits. The committee voted 16-5, with one abstention, in favor of moving forward with the plan.

The first step in the plan is an in-depth review of drugs to determine if they cause affordability challenges for Marylanders on state-run health insurance plans. Recently, the board selected six brand name drugs for cost review out of a list of hundreds.

The list includes medications for type 2 diabetes, allergic diseases, chronic kidney disease, heart failure and Crohn's disease including Dupixent, Farxiga, Jardiance, Skyrizi, Trulicity and the popular type 2 diabetes and weight loss medication Ozempic.

The board has determined the drugs are not only expensive for insurers to cover but also result in higher out-of-pocket costs for patients.

The plan would then establish a set of criteria for the state to negotiate with companies that are charging such prices for drugs that are at least partially covered by state insurance plans.

The board would also process recommendations for policies that don't fall under upper payment limits.

"It won't affect the Maryland supply chain," York said. "So, pharmacies and hospitals, wholesalers likely won't see their reimbursement change at all. We are proposing that it be done all kind of on the back end, through back-end reconciliation, through something called rebates."

The Prescription Drug Affordability Board is an independent agency of the state government that works to help protect state residents and the health care system from high drug prices. The board consists of five members who are experts in either health care economics or clinical medicine and 26-member stakeholder council.

Drug prices have been an issue affecting millions of Americans. A KFF poll in July 2023 found 28% of adults have difficulty affording prescription drugs.

About three in ten adults said they did not take their medicines as prescribed at least once in the last year due to cost. These include adults who did not fill a prescription, took an over-the-counter drug instead, cut their pills in half or skipped doses.

The Maryland board decision comes as moves have been made at the federal level to help lower drug prices. Under the administration of President Joe Biden and Vice President Kamala Harris, the cost of insulin has been capped at $35 per month for many Americans.

Additionally, the federal government has begun direct price negotiations on 10 widely used drugs paid for by Medicare Part D, with plans to add more drugs to the list in the future.

It remains to be seen if other states will follow suit. The Colorado Prescription Drug Affordability Board is meeting this month as it considering setting limits on how much state-run health insurance can pay for three medications: Amgen Inc.'s Enbrel, Johnson & Johnson's Stelara and Novartis AG's Cosentyx.