Prescription Drug Affordability Board Activity through December 18, 2024

Activities Summary

Colorado: The Prescription Drug Affordability Board (PDAB) met on December 6, 2024 to hear and discuss public comment before proposing and approving revisions to policy and procedures around affordability reviews. The PDAB updated the state's Prescription Drug Affordability Review Board and Advisory Council (PDAAC) on December 12, 2024.

Maryland: On November 25, 2024 the PDAB reviewed public feedback on its draft policies for upper payment limits, proposed and approved policy changes, and approved its annual report to the legislature. The board chose six medicines to undergo a cost review: Farziga, Jardiance, Ozempic, Trulicity, Dupixent and Skyrizi. Maryland's Prescription Drug Affordability Board Stakeholder Council (PDASC) met on December 16th to discuss clarifications to regulations. The definition of upper payment limit has been adjusted to be in terms of a “system net ingredient cost” that combines the patient's out-of-pocket cost plus and the payer is paying.

Oregon: At its November 20, 2024 meeting, the PDAB heard testimony regarding the Upper Payment Limit Report, made revisions, and approved it to send to the legislature. A subsequent meeting on December 18th devoted most of its time to potential changes to Oregon Senate Bill 844, which established the state's PDAB.

Washington: On November 13, 2024 the state's PDAB approved its Eligible Prescription Drugs Policy, delved into drug selection criteria and affordability reviews. and heard public comment. A December 10th meeting of the PDAB Advisory Group also focused on the drug selection process.

Activity by State

Colorado

Maryland

Oregon

Washington

Colorado

Colorado PDAB meeting, December 6, 2024

Meeting materials | Presentation | Recording

After the call to order, roll call, and member updates the board approved minutes from the previous meeting.

Director Updates by Lila Cummings and Board Business

Cummings provided an overview of the meeting agenda.

Discussion on Revisions to PDAB Policy and Procedures

Read the board's suggested changes to Policy Number 04 (Affordability Review Policy)

Clarify that the current wholesale acquisition cost (WAC) refers to the most recently available WAC for a prescription drug.
Move the “Brand name drugs and biological products” section under “For all prescription drugs” and strike the “generic drugs” section so that the policy aligns with the statute.
Mirroring proposed change to the rule: During the selection of eligible drugs for affordability review, stakeholder input will not be collected by the board on specific drugs unless the drug is an orphan drug or treats rare diseases.
The board will vote to adopt the affordability review report and decide whether a drug is unaffordable at the same meeting.
Conducting an affordability review:
- The board may consider the impact of a drug’s price on consumer insurance premiums and out-of-pocket costs, the impact of formulary placement on access, and the extent to which and manner in which rebates are shared with patients purchasing the drug as well as impacts on premiums, state expenditures/budget on the drug or disease, and other broader systemic financial impacts.
- The board will solicit input from patients and caregivers and individuals with scientific or medical training through public meetings, focus groups and surveys.
- Staff will gather input via public meeting, written and verbal comment from the Rare Disease Advisory Council (RAD) if the drug has an approved orphan drug designation and no other indications.
- Manufacturers and/or PBMs will provide information on patient assistance programs, negotiated rebates and 340B discounts. The board suggests making this directly applicable to Colorado patients, not US patients, and add “experience on specific assistance programs.”
- There will be a notice of submission of information – information can be submitted up to 90 days from commencement of an affordability review.

Redline available here.

Executive Session

The board met in executive session to receive legal advice regarding use of quality-adjusted life years (QALYs) as part of affordability reviews pursuant to section 24-6-402(3)(a)(II), C.R.S.

Rulemaking Hearing

Prescription Drug Affordability Board Rule 3 CCR 702-9: Part 1 - General Provisions and Part 3 - Affordability Reviews of Prescription Drugs

Rule Introduction

Witness Testimony

Bridget Seritt, founder of Advocates for Compassionate Therapy Now, made the point that QALYs are considered discriminatory by the federal government in affordability decisions.
Brian Warre of Biotechnology Innovation Organization (BIO) asked that the PDAB do a more thorough review of all of the components of the rule without dismissing stakeholder viewpoints.
Amanda Boone, the founder CF United, asked the board to identify people with dual interest, i.e. people who work for Arnold Ventures, PBMs or insurance carriers. For example, the PDAB law writer testifies in a lot of states on rare diseases; Jane Horvath, founder of Horvath Health Policy, is [employed] by Arnold Ventures and NASHP.
Tiffany Westrich-Robertson, CEO of AiArthritis noted that the rule still leaves patients who are not in the rare disease space out of the stakeholder discussion and that the PDAB should include them. She also asked that the board account for duality or conflict of interest in stakeholder and expert testimony.
Amy Goodman of Colorado Bioscience said that the PDAB needs to consider manufacturer and patient advocate feedback because of their expertise.
Dana Malick (PhRMA) expressed concerns about additional subpopulations.
Bret Johnson (AMGEN) was concerned that the methodology doesn’t talk about how the data points are weighed.
Sophia Hennessy (Colorado Consumer Health Initiative) echoed statement of colleagues from previous meetings.

Board Discussion of Testimony

(Click on the images to see the portion of the rule under discussion)

The board considered whether to remove “usage during a clinical trial?” E.g. input from users during a clinical trial.

The board discussed whether conflicts and duality of interest should be revealed by stakeholders and testifiers.

The board will only use studies that include QALY in the affordability review, not in the UPL study. Excluding studies that include QALY would mean not using all of the information available. The QALY can be excluded from the board analysis.

Definition of formulary placement: This doesn’t include utilization, only whether a drug is on the formulary and which tier it is in for preauthorization and access.

Board Deliberation

The board voted on and approved updates to Parts 1 and 3 of the Affordability Review rule as amended.

PDAAC Appointments and Reappointments

The board voted unanimously to reappoint Marc Reese, PBM representative; R. Brett McQueen, representing organizations that research prescription drugs and Katelin Lucariello, representing name brand drug manufacturers for a second 3-year term.

The board has open positions on the PDAAC for statewide healthcare advocacy organizations, labor unions, carriers, health care professional with prescribing authority, manufacturers of generic drugs and pharmacists. No one from labor unions or carriers has applied. The board unanimously voted to appoint Bob Mulch from AARP Colorado, Richard Miranda from St. Joseph Hospital, Fayez Azeez, CEO of Saptalis Pharmaceuticals, and Ingrid Pan, pediatric rheumatology pharmacist, to the PDAAC for a 3-year term.

Upper Payment Limits Rulemaking Structure

The staff recommended starting with Enbrel (etanercept). There will be three rulemaking hearings. Staff will present data for UPL benchmarks for the drug and its therapeutic alternatives and stakeholders will provide testimony at the hearings, with the rulemaking concluding at the third unless the board decides otherwise.

Upper Payment Limit Discussion

Staff memo begins on slide 22 of the presentation.

Considerations for UPL

Reasonable pharmacy fees: Any UPL does not preclude a pharmacy from charging reasonable fees for dispensing or delivering a drug.
QALYs: Data doesn’t use QALYs and identifies when research uses QALYs so that it can be removed before consideration.

The staff discussed the process for reviewing a drug to determine the UPL.

UPL Data

The board will receive:

Prescription drug and utilization data
UPL benchmark data
Drug shortage list data
Older adults and disability related data
Stakeholder input

The data types provided for Enbrel, Stelara and Cosentyx were provided in this chart:

Upper Payment Limit Data Submission Guideline

This hasn’t yet been drafted. Cummings asked the board to submit ideas for it, including potential patients affected by the drug and supply chain actors. The board discussed the benefits of an Upper Payment Limit (UPL) for patients, the current state of factors impacted by UPL, and the impact of a specific UPL dollar amount on transactions, rebates, discounts, and fees.

Public Comment

Amanda Boone: Internationally, health technology assessments (HTAs) limit rare disease patients’ access to medications when affordability is considered a more important value. Arnold Ventures has donated substantially to NASHP, Portal and other organizations that are dictating policy.
Bridget Seritt: QALY doesn’t do a good job determining whether a medication reduces the likelihood of hospitalization.
Amy Goodman: Still no discussion of concerns by key stakeholders.
Austin Blumenfeld, Centennial State Prosperity: Please lower drug prices.
Jen Laws, CANN: Must do a cost assessment of the UPL that includes the cost of implementing the process.
Brett Johnson: Please consider data sharing as a two-way street with stakeholders.
Ranier Simons, CANN: Detailed analyses of the potential impacts of an upper payment limit (UPL) in Colorado are needed. Oregon's PDAB found that implementing UPLs would only result in savings of less than half a million dollars for Medicaid due to the reduction of rebate values. Additionally, UPLs could negatively impact Oregon's federal matching dollars for Medicaid. Patient affordability issues are not captured in the All Payers Claim Database. Cooperation with agencies such as the Department of Health Care Policy and Financing, could provide valuable insights. Contingency plans for potential adverse effects of a UPL need to be discussed. See written statement.

Upcoming meetings

PDAB Meeting: January 17 at 10 am MT

Colorado PDAAC meeting, December 12, 2024

Meeting materials | Slides

PDAB Report Out

The board will not be using multi-criteria decision analysis for this round of appeals but may want to use it in future rounds. PDAAC questions were passed on to the PDAB board.

PDAAC Introduction

PDAB history was reviewed for new members. New members of the PDAAC were introduced to existing members.

Executive Session

Legal training for new PDAAC members in closed session.

Director Updates & PDAAC Business

Debrief of September 6 Joint Meeting

Lisa Cummings reviewed the upper payment limit process and rulemaking structure. Multi-criteria decision analysis (MCDA) will not be used by the PDAB for this round of upper payment limits (UPLs), but the board may use MCDA in 2025. Cummings reminded the PDAAC that the board is looking at a UPL for Embrel first, with at least three rulemaking hearings. The data submission guide structure was reviewed.

Board asked questions about timing and input for UPL analysis.

Upper Payment Limit

Staff Memo to the PDAAC

The PDAAC uses the staff memorandum as a guide for conversation and to help the board with input on the UPLs, focusing on impact of the UPL on patients and supply chain entities. PCAAC members asked questions about the UPL process.

PDAAC 2025 Meeting Schedule and Discussion Topics

Meetings will occur every other month through 2025.

Public Comments

No oral public comments were given.

Written comment was provided by Tiffany Westrich-Robertson, Ensuring Access through Collaborative Health (EACH) Coalition.

The next PDAB meeting will be January 17, 2025.

Maryland

Maryland PDAB meeting, November 25, 2024

Agenda | Recording

Opportunity for Public Comment

Harry Gewanter, board member of Let My Doctors Decide submitted written comment, noting that Maryland’s proposed implementation of UPL regulations may restrict access to necessary medications for patients, particularly those with rare or complex conditions. As written, the draft regulations could limit stakeholder participation and give the Board significant control over inputs, excluding certain viewpoints. Physicians and patients are concerned that the current approach risks overlooking individual patient needs and could disadvantage certain populations. Recommendations should include the roles of all players in the system, focusing on what patients pay.

Draft Regulations

The executive director reviewed the progress and next steps for UPL regulations. The draft upper payment limit action plan was presented to the board and was approved by the legislative policy committee on October 22, 2024. The next step is to adopt regulations that establish the policy review process. The draft includes an amendment to definitions, new regulations for hearings procedures, and a new chapter for the policy review final action and upper payment limits.

The draft regulations were posted on October 28, 2024. Public comment was received until November 8.

Public Input on Upper Payments Limits Policy Review

The public provided substantial comments on the policy. 16 letters were received and shared with the board.
The comments constituted about 85 pages, mainly focusing on the impact of upper payment limits on access, patient cost sharing, and the supply chain.
Feedback was also received on the process for going through these regulations, with concerns about timelines and the speed of the approval process.
The board appreciated specific feedback and implemented it as needed.

Key Points from the Feedback

The policy received good feedback on definitions, particularly around utilization criteria.
Questions were raised about the definition of the term “affordability challenge,” which was clarified.
The policy was also questioned about “net ingredient cost,” which was a topic of revision and clarification.
There were comments about the hearing regulations, the Administrative Procedure Act (APA) process, and a request for specific timelines.

Clarifications and Conclusions

Hearing Structure and Public Feedback

The structure of hearings was maintained to accommodate different formats and feedback.
Flexibility in regulations was maintained to avoid harming the board and preventing specific types of hearings.
The board chair was allowed to hold on repetitive comments, a term of art commonly used in hearing languages.
The APA process was confirmed to be in place, allowing the public more time to provide feedback.

Board Questions

PDASC Feedback

The Stakeholder Council reviewed the draft version of the regulations on November 4th. Discussions focused on clarifying definitions, on logistics and procedures, on general milestones, on timelines for setting upper payment limits, and on how the suspend process will work.

The main focus was on the definition of the upper payment limit.

The original definition was the ingredient amount paid by the eligible governmental entity.
The board clarified that the upper payment limit should account for out-of-pocket costs.
The new definition is the net cost of the healthcare system, which is out-of-pocket cost by the patient plus what the payer is paying. The new amount is adjusted when calculating the payer's payment, minus out-of-pocket cost.
The new amount is now the total cost of the healthcare system, which is up to each payer to apply to their plan design. The board will work directly with eligible governmental entities on this policy.

Updates to Regulations

The board seeks emergency action on proposed amendments to .05 under COMAR 14.01.04 Cost Review Study Process. The text of the proposed amendments is available here.

Summary and Presentation by the Executive Director

1. Amend COMAR 14.01.01.01 (definitions)

2. Add COMAR 14.01.01.06 (hearing procedures)

3. Add COMAR 14.01.05 (Policy Review, Final Action, Upper Payment Limits)

1. The regulatory changes include nine parts: definitions, criteria for setting up representative payment limits, policy review and final action process, information gathering, preliminary policy recommendations, establishing an upper payment limit, final Policy Act, establishing and monitoring UPL, and reconsideration process.
2. UPL Policy Review Process: The first step is to identify the drivers causing the affordability challenge and recommend different policy options. There are two buckets of policy options: non-UPL policy options and the upper payment limit policy option. Concerns have been raised about the board overemphasizing the upper payment limit. The staff views all policies as on the table, treating the non-UPL policy option process in the same light as the upper payment limit policy process. The staff will gather information on potential policies, identify the drivers causing the affordability challenge, and bring those recommendations to the board. The board can provide feedback on these policy recommendations. The staff will update their recommendations based on feedback and propose draft resolutions. The final action for non-policy actions would be to adopt resolutions in a board meeting.
3. Upper Payment Limit (UPL) Process Overview: The process involves calculating the upper payment limit for a prescription drug product, which is then published for public comment and then brought to the board for approval. Technical meetings or technical hearings are held to address technical and nuanced discussions around methodologies.
  1. The final version of the calculation is published for public review before it goes to the board.
  2. The final action for the board is to update the UPL as a proposed regulation.
  3. Three definitions were created to flag changes from the draft version:
    - The definition of eligible governmental entity upper payment limit was created, accounting for both the out-of-pocket cost for the patient and the eligible governmental entity.
    - The system net ingredient cost was defined, accounting for all discounts and price concessions, excluding dispensing fees and administration fees. Direct and indirect remuneration to pharmacies were excluded, but it still includes out-of-pocket costs.
    - The new definition for upper payment limit represents the amount established by the board and represents the system net ingredient cost. “The board shall not set an upper payment limit if the spending on the prescription drug by the product by the eligible governmental entity is less than the administrative cost to implement an upper payment limit.”
  4. The criteria for the process remained the same, largely articulated in the Upper Payment Limit Action Plan and the regulations.
  5. The policy review process includes informational gathering, setting preliminary policy recommendations, and adopting the final cost for the report, non-policy recommendations, and proposed regulations setting the upper payment limit amount.
  6. The new information gathering process includes public informational hearings, stakeholder council input, technical hearings, board and staff research and analysis, and information from eligible governmental entities.
  7. The board may adopt or modify one or more of the policy recommendations after the affordability challenge determination is final for the upper payment lifts.
  8. The final action on the policy recommendations has to happen after the affordability challenge determination is final for the upper payment lifts.
  9. If the upper payment limit is recommended, the staff may analyze the drivers and market conditions causing the affordability challenge, the ability of a UPL to address that issue, relevant regulatory criteria, and the use of the drug by the governmental entities.
  10. The process for establishing the upper payment limit involves recommending methodologies in contextual information and articulating the contextual information that the board can consider.
4. Upper Payment Limit Development and Technical Hearings Methodology and Contextual Information: The development of upper payment limit values was influenced by various comments from stakeholders. Some expressed concerns about specific methodologies and the need for clear communication about which methodologies would be used. Concerns were raised about combining methodologies, as they are developed to answer specific questions.
  1. Contextual Information: Staff pointed out that contextual information would likely increase the UPL of the drug and emphasized the importance of including different contextual information in the final upper payment limit setting.
  2. Calculating the Upper Payment Limit Value
    - The board may select one or more of the methodologies and conceptual information.
    - Staff will provide recommendations but can also suggest a different methodology.
    - Staff will post the public version of the upper payment limit values in the analysis and the recommendation of which one they recommend.
    - The public version will also descriptor the calculation and analyses and relevant underlying assumptions used in the analysis.
  3. Technical Hearings
    - The board may convene a hearing for the purposes of receiving technical input or expert testimony.
    - The board staff can take information from the board reviewing the upper payment limit calculation and revise it in an amendment.
    - Any changes made to the upper payment limit will go before the public again for comment.
5. Final Determination of Affordability Challenge; The board will have to finalize the affordability determination and publish the upper payment limit as a regulation. Each upper payment limit will be done as a regulation.
6. Establishing and Monitoring the Upper Payment Limit: A plan will be developed to monitor the availability of prescription drugs, passive and active monitoring.

4. Reconsideration Procedures for Drugs

The board has the authority to reconsider an upper payment limit.
Four options for drug reconsideration: no action, allowing the ELD to stand, modification of UPL amount, suspension of UPL for a specified period, and repeal of the upper payment limit.
The general process includes publishing different documents and ensuring necessary information for adjustments or necessary actions.
For drugs where the upper payment limit is fully repealed, the entire cost review study process must be followed.
If the upper payment limit is a tool, previous experience can be considered, but the full process must be followed from the beginning.

Draft regulations were approved unanimously by the board.

Annual Report

Presentation | Full report

On December 31, 2024, the board will submit an annual report to the Senate Finance Committee and the House Health and Government Operations Committee. It will review price trends for prescription drug products, the number of products reviewed by the board, and recommendations for further legislation to make those products more affordable.

The board discussed the cost review study process, referring eight drugs to the stakeholder council for input. Six drugs were selected for study, and a request for information was issued for four of them. The board also included a list of board actions related to the cost review process. Six drugs are subject to the cost review process, and no results are yet available. The board will summarize the results of each cost review study and work on the upper payment limits and the upper payment limit action plan in future reports. The drugs selected for the cost review study process are:

Farziga
Jardiance
Ozempic
Trulicity
Dupixent
Skyrizi

Biktarvy and Vyvanse were not selected.

The report cites the 2024 National Drug Pricing Trends report highlighting an increase in out-of-pocket costs per retail prescription, patient aggregate out-of-pocket cost, and list price. However, this growth is slower than in previous years. The report also notes an increase in the launch prices of new drugs in the 2023 market and mentions the need to reconcile the proportion of premiums going towards prescription drug products with overall healthcare spend. The board is looking into Maryland-specific data and may release future reports covering this.

By April 2024, 11 states established prescription drug affordability boards, with four granting them authority to establish upper payment limits. Many states and the federal government are working on legislation addressing affordability.

The 2022 IRA restricts drugmakers' price increases for Medicare treatments. The program can negotiate prices for a limited number of existing drugs. The first cycle of Medicare price negotiations involved 10 drugs. Negotiated prices were revealed in 2024, and they will take effect in 2026. The IRA restricts Medicare enrollees' out-of-pocket spending to $2,000/year and insulin to $35/month.

The U.S. biosimilars market is growing, with estimated savings increasing by 30% from 2022 to 2023. Biosimilars only make up a third of the biological product market in 2023. In June 2024, the FDA issued a draft guidance to ease interchangeability requirements for manufacturers. However, many challenges remain to biosimilar uptake.

From 2019 to 2023, the number of non-diabetic patients starting GLP-1 RA (Glucagon-Like Peptide-1 Receptor Agonists) therapy in the U.S. climbed by over 700%. Off-label use of GLP-1 RAs nearly doubled from 2019-2023, leading to domestic and international shortages. Medicare does not cover weight loss drugs. Maryland Medicaid covers certain GLP-1 RAs for type 2 diabetes treatment. Maryland will investigate the impact of requiring Medicaid to cover weight loss GLP-1 RAs.

The Board will continue to collect data and analyze it in accordance with COMAR 14.01.04.05 for the Cost Review Study Process. They expect to make a preliminary determination on whether the drugs in the process may cause affordability issues in late 2024 or early 2025. They also plan to propose regulations establishing the Upper Payment Limit framework.

The board voted to approve the annual report.

Cost Review Study Process

The cost review study has received all expected data and is drafting documents for public release. The board is expected to conduct a preliminary affordability analysis in upcoming meetings.

Data Discussion
Farxiga - Over 60-day comment period, patient input and physician comments were received for Farxiga, and seven RFIs were responsive to data related to Farxiga.
Jardiance - Jardiance received two comments, and seven responses from the RFIs, providing valuable information for a comprehensive summary.

Administrative Update

The cost review study process continues.

Chair’s Update and Adjournment

The chair expressed gratitude to the staff. Meetings will be virtual in January and March. The board adjourned until January 27th, 2025.

Maryland PDASC meeting, December 16, 2024

Meeting materials

After call to order, roll call and November 4, 2024 meetings minutes approval, the PDASC provided opportunity for public comment. No public or written comments were given.

Upper Payment Limit Update – Presentation

UPL Status and Next Steps

The board approved the UPL Action Plan on 9/10/2024. Afterwards, the Legislative Policy Committee approved UPL Action Plan on 10/22/2024. Draft regulations establishing the Policy Review Process were posted and open for public comment until 11/8/2024. The draft proposed regulations were approved by the Board on 11/25/2024. (Additionally, but not mentioned, the PDAB published a Supply Chain Report on 9/10/2024.)

Next, draft Proposed Regulations will be submitted through the standard APA process.

Regulations

Addressing Specific Comments

Overall Feedback

Concerns with UPL as a policy tool
What are the unintended consequences of the UPL? Impact of UPL on access, patient cost sharing, and supply chain
Concerns with Board process in developing UPL policies
Concerns with specificity of certain definitions, criteria, and steps

Specific Feedback

Definition clarifications
- Utilization
- Definition of Term Affordability Challenge
- Net ingredient Costs
Hearing regulations
APA process clarification
Timelines for Specific Steps and Opportunities for Comment

PDASC provided feedback on November 4, 2024. Main discussion focused on definition suggestions and clarifications. They also discussed hearing logistics, procedures, timelines, consumer expectations, monitoring, enforcement and UPL suspension clarification.

Updates to Regulations

Technical changes were made to incorporate specific feedback.

Amendments to COMAR 14.01.01.01 (Definitions)

.01 Definitions - Added and updated definitions below:

(56) “Purchaser” means an entity that purchases prescription drug products that is not a payor or a patient.
(62) “System net cost” means the sum of the net cost as defined above and the per unit patient out-of-pocket cost.
(71) “Utilization” means information about the use of a drug including the number of units, the number of patients and number of prescriptions or claims.

New Chapter - COMAR 14.01.05 (Policy Review, Final Action, Upper Payment Limits)

The definition of upper payment limit was clarified, including adding “eligible governmental entities upper payment limit” (GovUPL) and clarifying definition of “system net ingredient cost.”

This is the most important and robust change they made based upon the PDASC. The UPL is defined as the patient out of pocket cost plus what the payer is paying. The board didn’t want the UPL to push more of the cost share onto the patient. The board is setting the net price to the healthcare system not necessarily the cost to the patient. That will be determined by the healthcare system.

Clarification on UPL criteria, including clarifying the term “minimal.” Minimal was changed in changed in the language to “if the cost to implement the UPL is greater than the potential savings” for the purpose of determining whether an UPL would be used. If the cost is greater, then no UPL would be implemented.

Clarifying UPL value calculations. This was included on a slide, but no details were provided in conversation. (See pages 8-10 of the report for the seven potential calculation methodologies .)

Updates to Regulations

Technical changes from the first to second iterations of the regulations are described in subsequent slides
Changes were made to incorporate specific feedback and comments.

Cost Review Study Process – Presentation

No presentation was shared. The PDASC was given an update by Dr. York.

The drugs under cost study review currently are Farxiga and Jardiance.

Data has not yet been published and is not available for the public. This should be happening through early 2025. The next two drugs are Ozempic and Trulicity. The board will review the information from the drugs called “the dossier.” For all diabetes drugs they included all drugs within similar therapeutic guidelines. They are prioritizing comparison across the SGLT2 (Sodium-glucose cotransporter-2) class.

Administrative and Co-Chair’s Update

The next meeting will convene on February 24, 2025.

Oregon

Oregon PDAB meeting, November 20, 2024

Agenda | Video

After minutes were approved, the executive director presented his report.

Executive Director’s Program Update

The executive director of the Drug Price Transparency Program (DPP) at the Department of Consumer Affairs (DCBs) is preparing for several events over the next four weeks. The first event is an open public meeting on Pharmacy Benefit Managers (PBM licensing) from 1:30 to 3:30 on November 20, 2024. The next event is a Rules Advisory Committee meeting for the Drug Price Transparency Program from 10:00 to 11:30 am on November 22, 2024. The program will also host its annual hearing on December 4th from 10: 00 to 12:30. The hearing will include highlights of data and findings from manufacturers, carriers, and pharmacy benefit managers. The program will also host two separate panel discussions with Oregon legislators to discuss drug advertising and rebates.

The executive director will also present on the Upper Payment Limit Report to the Senate Interim Healthcare Committee, which the board will be finalizing at the same time. The final meeting of the year will be held on December 18th to discuss and approve policy recommendations to the legislature. The staff will also meet with the Center for Evidence-Based Policy staff at Oregon State University to follow up on the board's request for a formal proposal.

Oral Testimony

Dharia McGrew, PhD, Director of State Policy, PhRMA

Although the board and staff had made several improvements to the study, McGrew believes more work needed to be done. They urged the board not to advance the current proposal to the legislature because:

The current draft of the study oversimplifies the complexities and administrative challenges that would arise from the proposed approaches and does not dive deep enough into them to fully understand how they would work.
The board's theory that the state could effectuate multiple UPLs at the same time drastically underestimates the complexity of the situation and what may or may not happen in a supply chain.
Stakeholders have raised concerns about administrative complexity and not being able to understand what the state was proposing. The board's current draft does not demonstrate potential savings from a UPL or that they would outweigh substantial risks. The board's proposal is too broad and lacks enough detail for anyone to truly analyze the costs it would take to implement or the cost to the system or patients.

Lorren Sandt, Caring Ambassadors

Sandt expressed concern about the oversimplified UPL study and the potential for litigation in other states. She urged the board not to pass it today and to study the potential benefits and costs before implementing it.

Ranier Simons, State Policy Director, Community Access National Network (CANN)

Simons raised concerns about the proposed draft of the Universal Pharmaceutical Benefits (UPL) as a cost containment strategy. The report acknowledges significant variations in data based on carrier market type but also issues with the quality of the data. The report describes potential cost savings as nearly equal to the potential cost, but data from CMS indicates that any cost savings achieved by UPL would only be due to cost shifting.

John Mullin, Oregon Coalition for Affordable Prescriptions (OCAP)
Submitted written testimony.

He encouraged the board to move forward on the UPL report, which includes new concepts and suggested language from board members.

Brian Warren, Biotechnology Innovation Organization (BIO)

Warren emphasized the need for careful consideration of the report's assertions, as it could paint an artificially optimistic picture of UPL. The implementation of the program would come with significant risks and uncertainty. The report glosses over the complexities of the supply chain and addresses potential problems with an "it'll be okay" attitude without back up.

Elana Lynn, OSPIRG

Lynn emphasized the importance of the Upper Payment Limit (UPL) report in addressing prescription drug costs. She emphasized the need for bold action to cap excessive drug costs, improve medication adherence, and promote fairness and transparency in UPL policies. She commended the board's efforts in public engagement and urged collaboration for a healthier future.

Lucy Laube, State government relations representative for the western region of the National Psoriasis Foundation

Laube applauded the board's decision to pause drug reviews and allow for stakeholder feedback. She believes patients have the right to be concerned about the impact of state policy on accessing and affording their specialty medications. She also expressed concern about the potential increase in utilization management and the risk placed on vulnerable populations. She suggested shifting focus to entities like PBMs and tactics that directly affect patients' out-of-pocket costs.

Dr. Harry Gewanter, Let My Doctor Decide Action Network

Gewanter expressed concern about the potential unintended consequences of the proposed UPL approaches in the Senate file 192 report. He emphasized the importance of access to specialized and innovative therapies, particularly for conditions like juvenile idiopathic arthritis or lupus. He urged the board to focus on affordability, considering the entire drug supply and distribution chain, including the roles of payers and PBMs. He urged the board to prioritize patient access and well-being over arbitrary legislative deadlines and work on more inclusive comprehensive solutions. He also expressed his willingness to work with other physicians and patients on more inclusive solutions.

Board discussion and approval of Senate Bill 192 upper payment limit final report to send to the Oregon Legislature

Report with redline (begins on page 5) | Final approved report

The board discussed and approved the final report on Senate Bill 192, the upper payment limit, to be submitted to the Oregon Legislature.

Staff incorporated comments from discussion at the October 16th meeting into a draft report and circulated the updated report to board members for review. The board will review and discuss the added comments and vote on whether to send the report to the legislature. The report sheds light on complexities of the supply chain and potential impacts related to UPL, rather than offering a formal recommendation from the PDAB or its members related to them.

The board reviewed the proposed executive summary, then moved to sections.

Public comment: Julie Black, director of member services and business development at Oregon Bio Science spoke about the importance of policies that lead to new treatments and ensure affordable access to existing drugs and devices. The proposed Senate Bill 192 report recommendation acknowledges stakeholder feedback and encourages the board to carefully consider the claims and conclusions made in the draft report about drug pricing and UPL implementation. The draft oversimplifies the process for setting drug prices and lacks critical findings related to drug pricing, research costs, failure rates, and treatment costs.

The board discussed the importance of incorporating feedback from stakeholders in the executive summary of the Upper Payment Limit (UPL) report. Pharmacists and community pharmacists felt that the report did not adequately address stakeholder comments on solutions other than UPL. The Board was split on providing additional information on other kinds of cost control strategies besides UPLs: some believed the summary should include other strategies, others only wanted to address UPLs. After two tied votes, the board concluded that stakeholder feedback would not be included in the executive summary but would remain in the body of the report. After addressing other items in language within the document, the board voted 7 to 1 to approve the report and send it to the Oregon legislature.

Oral Comment

Mark Stoy, a 74-year-old resident of southeast Portland, spoke about billing transparency and the impact of the PBMs on healthcare costs. Stoy has terminal cancer and has spent six days in the hospital, having two surgeries, and vomiting blood. He suggested getting more feedback from consumers and stakeholders to ensure accurate reimbursement rates and prevent neutralization by PBMs. Stoy also highlighted the need for better provider web pages and budgeting for healthcare costs.

Read additional written comments here.

The next PDAB meeting will be Wednesday, December 18, 2024, 9:30 A.M. Pacific Time. (Agenda)

The Oregon PDAB released a year-end in review newsletter, available here for review.

Oregon PDAB meeting, December 18, 2024

After call to order, roll call, declaration of conflict of interest and approval of November 20, 2024 minutes, the executive director, Ralph Magrish, gave a program update. The board has welcomed new members, including Chris Laman, Dan Kennedy, and Lauri Hoagland, and seated new chairs and vice chairs. The research and analytic team has been staffed up. The board expressed gratitude to board members, staff, contractors, and the counsel of the Oregon Department of Justice for their efforts.

Public Comments

10 written comments were published on the website. Oral comments were provided by the following:

Eric Lohnes, PhRMA: He disagrees with the board's approval of a draft UPL study, which they believe fails to fulfill the board's statutory mandate, uses flawed assumptions,and oversimplifications. He commends the board members for their robust discussion on various policy options. However, he raises concerns about the report's structure and whether it adequately communicates the complexity of the subject matter. The board's rush vote was taken, but it was largely a function of being rushed, as Director Ralph Grish encouraged the board to speed up and discourage excessive time spent on the meeting.

Lorren Sandt, Caring Ambassadors: The speaker discusses policy recommendations for increased patient engagement, including the inclusion of a stakeholder board and a patient engagement board in the legislative agenda. Speaker also suggest adding language stating that dispensing fees cannot be paid by patients, as it is unfair for Pharmacy Benefit Managers (PBMs) to put pharmacies out of business.

Terrell Sweat, Johnson & Johnson: The board voted on a review of affordability for 2024, but has not taken steps to assess and improve the criteria and methods for drug selection. The board should publish prepared documents for board meetings with sufficient time for stakeholder review, as posting them on the PDA website a few days before meetings can be time-consuming. The board may receive more meaningful input if they have at least two weeks to review materials. The company is committed to developing accessible medicines for patients and is humbled by the patients who trust them to fight their diseases.

Ranier Simons, Community Access National Network: The affordability of HIV medications has been determined not to be an issue due to low insurance co-pays and easily accessible patient assistance programs. HIV is one of Medicare's six protected classes, and at the end of 2023, 8,242 Oregonians living with HIV were supported. To avoid damaging access to an already fragile antiviral ecosystem, please keep HIV medications off the affordability review list.

Jen Laws, Community Access National Network: The board should not consider medication for HIV treatment due to the fragile ecosystem and its dependence on rebate revenues. The National Alliance for State and Territorial AIDS directors have already negotiated acquisition rates lower than the 340B floor for these medications. The affordability issue in HIV has not existed for 30 years due to the program's design. The board should consider other states' findings and not consider these medications based on its own report.

Brian Warren, BIO: He said that the SB 192 UPL report has many unanswered questions. Despite these concerns, the board seems comfortable with UPLs and confident in their ability to lower costs for Oregonians. However, there is still a distance between the board members' experience and the public perception of where the board might be. The discussion highlights the need for a more comprehensive approach to the drug selection processes for next year's affordability review.

Board Discussion and Vote on Policy Recommendations for the Oregon Legislature

Proposed policy recommendations

The board discussed changes to Senate Bill 844. Document here.

Change language from “nine drugs a year” for affordability reviews to “up to nine” drugs a year.
Remove requirement that Department of Consumer and Business Services (DCBS) provide PDAB with a list of prescription drugs each calendar quarter.
Removal of the generic drug report annual requirement, with a new provision that relevant content would be incorporated into the affordability review report. The information could include generics or biosimilar availability, pricing, and marketplace commentary when relevant to drugs under review.

The board voted unanimously to approve these three policy recommendations. The board discussed additional recommendations:

Patient assistance program (PAP) reporting to the Drug Price Transparency (DPT) program. Expand PAP requirements to include manufacturer coupons and any other payment that reduces a patient’s out-of-pocket cost to fill a prescription. The board also recommends manufacturers be required to report on all patient assistant programs they maintain or fund.

The board voted to approve policy 4.

Pharmacy benefit managers (PBM) and insurer reporting on copay accumulators and maximizers.Implement mandatory reporting on copay accumulator and maximizers programs to ensure equitable access to essential medications and prioritize transparency. With enhanced reporting, the board will aim to monitor the impact of copay accumulators on patient costs and access to medications.

The board feels that this is not specific enough. Motion to approve policy 5 with at edit to say “stipulating that these data be reported to the drug price transparency program.” Motion passed unanimously with one recusal.

Uniform reimbursement rate for critical access pharmacies (CAPs). This applies to all PBMs CAPs contract with
1. Uniform reimbursement rate: All claims for prescription drugs and services provided by critical access pharmacies (CAPs), whether under Fee-For-Service (FFS) Medicaid, coordinated care organizations (CCOs), commercial insurance, or any prescriptions adjudicated through exchange payors, shall be reimbursed at the exact same rate as the CAP FFS Medicaid rate. This ensures payment parity for all payors when reimbursing CAPs
2. Non-discriminatory reimbursement: CCOs, commercial payors, and PBMs would be prohibited from reducing payments or imposing discriminatory terms on CAPs. All payors must adhere to the CAP FFS Medicaid rate when reimbursing CAPs for identical services or medications

Additional language was suggested:

1. All payors, including CCOs, commercial health plans, health insurance plans offered through state or federal exchanges, and PBMS, shall utilize a pass-through pricing model for all prescription drugs.
2. Under such model, the amount billed to the payor for each dispensed prescription shall be equal to the amount reimbursed to the pharmacy, consisting solely of the Average Actual acquisition Cost (AAAC) plus the state-determined dispense fee.
3. The pass-through pricing model shall not alter patient copayment amounts.

The board voted whether to approve policy 6 as amended. The vote was tied and failed. The board was asked to clarify why they voted “No” to address concerns. No response from the board.

Consolidated Appropriations Act (CAA) disclosures about reimbursements and fees to employer plans from brokers.
1. Any broker or entity facilitating the purchase of health insurance or prescription drug benefits for purchasing entities must provide an annual disclosure of all direct and indirect compensation received, as required by the CAA. This disclosure must include any commissions, fees, or other forms of compensation related to the transaction.
2. Brokers must proactively offer these CAA-compliant disclosure schedules in writing to the relevant purchasing entities (OEBB, PEBB, FFS, Medicaid, ArrayRx, Page 2 of 4 Proposed policy recommendations ) during contract negotiations or renewals and no later than 30 days prior to the renewal of any contract or service agreement.

The board voted whether to approve policy 7. Vote passed with one dissent.

Fees across all payers.
1. Minimum reimbursement for all prescriptions: All payors, including CCOs, commercial health plans, exchange-based health insurance plans, and PBMs operating within the state, shall reimburse pharmacies at a rate that is no less than the average actual acquisition cost (AAAC) of the drug plus the state determined dispensing fee. This reimbursement structure shall apply to all prescriptions dispensed by pharmacies in Oregon.
  1. The AAAC of a drug shall be determined based on the Oregon Medicaid AAAC pricing or the equivalent national pricing index adopted by the Oregon Health Authority (OHA).
2. The dispensing fee shall be equal to or greater than the dispensing fee used in Oregon’s Medical Assistance Fee-for-Service Medicaid Program which is currently $10.65. The dispensing fee may be updated periodically based on updated surveys or economic conditions.
3. Prohibition of below-cost reimbursement: PBM or payors shall not reimburse a pharmacy at or below the pharmacy’s acquisition cost for any prescription drug.

Additional language was suggested:

All payers, including CCOs, commercial health plans, health insurance plans offered to the state or federal exchange and PBM, to utilize a pass-through price model for all prescription drugs
Under such model, the amount billed to the payor for each dispensed prescription shall be equal to the amount reimbursed to the pharmacy consisting solely of the Average Actual Acquisition Cost (AAAC) plus the state determined fee.
The pass-through pricing model shall not alter patient copayment amounts.

Board voted whether to approve policy 8 as amended. Vote was 4 to 4. Motion failed. The chair asked for additions or deletions that would change vote for those that voted no.

Board amended policy 8 as follows:

All payers, including CCOs, commercial health plans, and PBMS operating within the state shall reimburse dispensing fees equal to or greater than the dispensing fee used in Oregon’s Medical Assistant Programs. The dispensing fee may be updated periodically based on updated surveys or economic conditions. The model shall not alter patient copayment amounts.

Board voted to approve policy 8 as amended. Vote was 7 to 1. The policy was approved as amended. The numbering of the policy became 9. And all further numbering was adjusted.

(previously 9) OHP FFS and CCOs purchasing through a statewide purchasing group.
1. Statewide purchase groups shall utilize are programs that leverage the collective buying power of state agencies to secure better prices and terms for goods and services. These programs are designed to make procurement more efficient and cost-effective for state and local government entities

Vice Chair Burns pointed out that this is already in statute. Board voted with the inclusion of the word “shall” and passed 5:2.

(previously 10) Statewide Preferred Drug List (PDL) for Oregon Health Plan (OHP) FFS
1. OHP FFS has a uniform PDL for some classes. However, to use the most cost-effective medications and to reduce administrative burdens for providers, it is recommended to extend the current PDL for all classes to CCOs for coverage of prescription drugs.

The policy was approved 5 to 2 with suggested amendments noted.

Board Discussion and Vote on Annual Report to the Oregon Legislature

Board Received Preliminary List of Prescription Drugs, Insulin for Affordability Review

The meeting was adjourned at 12:22.

Washington

Washington PDAB meeting, November 13, 2024

Meeting materials | Video

PDAB Director's Report, presented by Mike Neuenschwander

The Advisory Board has been answering questions from industry partners and refining their work, updating their draft eligible drug list and tweaking calculations to clarify some aspects. The dashboard is close to being completed, but final tweaking and inputting of data are still ongoing. Methodology (document here) and selection process of the dashboard will be discussed, including waiting and rankings, submissions, and how it shapes the top-25 drug list.

In a follow-up public comment, Sarah Lanford from the Policy and Advocacy Association for Clinical Oncology asked about how the PDAB selection process will work with physician-administered drugs. The criteria for identifying eligible drugs for review are based on how the drugs are dispensed. If a drug is dispensed from a retail specialty or mail order pharmacy, it is eligible to be counted under the drug list. Physician-administered drugs, such as long-acting injectable medication, are also eligible because they are available through specialty pharmacies, even though they are most frequently administered in clinic. A good example of this is long-acting injectable opioid use disorder medication, like Sublocade, which is available through specialty pharmacies. Even though they cannot be dispensed to a patient and must always be administered by a physician, they meet the eligibility criteria. Limited distribution pharmacies also meet the statutory definition for being. Pharmacists label medications with the patient's name and leave them at a pharmacy, even if they go to a physician's office for administration. This allows these drugs to be included on the list, despite not typically being considered eligible for review.

The board will be voting on updates to the eligible drug list identification policy, which it has been working on over the summer. The policy will be used to create an initial drug list that will be used to create a dashboard. The board has received feedback from industry and has made some policy changes.

Vote on Updates to Eligible Drug List Identification Policy

The Eligible Prescription Drugs Policy was approved by vote of the PDAB.

This policy states that each year the board will identify prescription drugs that have been on the market for at least seven years, are dispensed at pharmacies, are not for the treatment of rare diseases and meet the following thresholds:

Brand name or biologic drugs that
1. Have a wholesale acquisition cost of $60,000 or more per year or course of treatment lasting less than one year
2. Have a price increase of 15% or more in any 12-month period, for a course of treatment lasting less than 12 months, or a 50% cumulative increase over three years
Biosimilar products with wholesale acquisition costs that are at least 15% lower than the reference biological product; and
Generic drugs with a wholesale acquisition cost of $100 or more for a 30-day supply or less that have increased in price by 200% or more in the preceding 12 months.

The process for identifying eligible products for affordability reviews is detailed in the policy.

Review Drug Selection Policy

The plan is to develop a stakeholder information form, collecting narratives and data from all stakeholders, including manufacturers, patients, and experts in the subject matter. The goal is to make the review process more efficient and effective.

The board will follow up with other boards to understand what happened in their states, as some states have found drug reviews more complicated than anticipated. Colorado has completed five drug reviews, while Maryland has selected some drugs for review. Oregon has restarted some reviews, and they are expected to be completed by December 2025. However, upper payment limits are not due until 2027.

The board discussed the importance of setting a number for the affordability review phase, with the suggestion of starting small, adding more drugs and doing multiple parallel reviews of drugs to ensure that the data received from each manufacturer aligns with other resources. Other states provided information showing that information collection for drugs can take up to nine months.

Discuss Data Dashboard and Weighting of Drug Selection Criteria

Brief Overview of RCW 70.405.040: Affordability Reviews

The board is currently at the selecting drugs for affordability review stage, which, per statute, involves considering three data measures: the class of prescription drugs and the availability of therapeutic equivalent drugs; input from relevant advisory groups; and the average patients' out-of-pocket cost for the drug. The board can choose up to 24 drugs a year to review.

The board proposed four quantitative data measures: total out-of-pocket cost, total amount paid, drug meets multiple thresholds of the legislative definition, and size of population using the drug. These four data measures were ranked and weighted for each prescription drug. The top 25 prescription drugs with the lowest weighted rank form the board’s affordability review short list. The board then reviews the weighted rank in all data measures, both quantifiable and non-quantifiable, to select prescription drugs from that short list for affordability review.

The methodology for selecting prescription drugs for affordability involved a prioritization exercise where the board members sorted each data measure in descending order and assigned rankings. The weighted rank for each drug was computed by summing the rank of each data measure multiplied by its corresponding weight. Each board member was given 20 points, totaling 100 points across five board members. The more points they allocated to a data measure, the more important it was to them.

See example:

The weights created from the prioritization exercise showed that total out-of-pocket cost was the overall most important data to the board when selecting prescription drugs for affordability review, being weighed the most heavily out of the three measures. The total number of people using the drug was the least important, being weighed the least.

The study focuses on the ranking of prescription drugs based on their average out-of-pocket cost. The highest-ranking drug is assigned a rank of one, while the second highest cost is assigned a rank of two, etc.

The study highlights that most of these drugs are specialty drugs, e.g. oncological medicine, biologics and MS drugs. On average, only 3 to 5% of patients use them. The state of Washington has the highest threshold and cost per year, at $60,000 per year, compared to other states like Colorado, which have lower costs and drugs to treat more common issues like HIV and diabetes. The pharmacist on the board pointed out that the out-of-pocket cost of these drugs is determined by the insurance company, not the drug company, and will be different for different insurance companies and different plans.

In conclusion, the discussion highlighted the importance of considering the data source for affordability reviews and the potential for a more comprehensive list of indications.

The mission of the group is to prioritize affordability to Washington consumers. The law states that for prescription drugs chosen for an affordability review, the board must determine whether the prescription drug has led or will lead to excess to cost to patients and or will cause excess cost to healthcare systems. The board can choose drugs that have an above-the-norm out-of-pocket cost, as well as those that are not sustainable for the state and private health care systems.

After creating the preliminary short list, the board will look at the weighted rank and data measures together to select prescription drugs for affordability reviews. Other states did not pick the same drugs for review, with the exception of Embrel in Colorado. This may be due to lower cost thresholds in other states or because the Washington requirement that the drug must be on the market for at least seven years to qualify for review.

If the board wanted to request to change the criteria for selecting in the legislation, it couldn’t be introduced until 2026.

Board Discussion of Affordability Review Overview

The board discussed the importance of balancing affordability to patients and affordability to the healthcare system. The board questions how to get insurers to lower the co-pay, suggesting they may charge patients the same co-pay as prior to the establishing of an UPL. The legislation says that the upper payment limit established by the board must be used to reduce cost to consumers, prioritizing the reduction of out-of-pocket costs for prescription drugs. Upper payment limits must be used entirely to reduce cost to consumers. Each health plan subject to upper payment limits must provide a report to the Health Care Authority demonstrating how they used the savings in the previous calendar year. However, neither the board nor the Health Care Authority can force the insurers to pass on the savings to the patients.

The board highlighted the low number of people using the drugs on the Washington eligibility list and the challenge of determining the eligibility criteria for a drug list. The discussion highlighted the importance of considering the entire usage of a drug, rather than just a specific subset. Identifying the most effective drugs that can lower costs for consumers will be challenging. The discussion also touched on the need to consider the availability of generics or alternative options, drugs available only through specialty pharmacies, and the exclusion of infusions.

Based upon the discussion, the board members asked to revise their votes on criteria selection. They have a week to do that.

Public Comment

Public comments:

Daria McGrew, Director of State Policy, PhRMA
The board has mandate for choosing drugs but has not yet considered all of them. Please look at the Oregon drug list again, several drugs were found to be ineligible due to errors in data analysis. The total price paid was ranked fairly highly by the board's point allocation, but prices paid in pharmacy claims are not reflective of the net price or actual price paid by plans and payers. Hospital markups on drugs skew data in All-Payer Claims Databases upwards, which may have some bearing on the discussion about the prevalence of specialty drugs on the preliminary list.

Data on patient out-of-pocket costs give a metric of patient affordability, but many of the drugs in the preliminary subset list are likely highly rebated drugs. The proposed framework for affordability review would look at quantifying net costs in the next step, but the board should recognize that the subset list from the ranking exercise is based on artificial prices that are not reflective of the real drug cost to payers.
Ronnie Shore, a retired pharmacist on the Advisory Group
He supports the decisions to choose drugs based on the values discussed. He believes that considering out-of-patient pocket costs, insurance companies, and pharmacy benefit managers also impacts drug costs.

Next Meetings

Washington PDAB Advisory Group Meeting, December 10, 2024

Agenda | Recording pending

After welcome and introductions, the board discussed the advisory group lead.

Drug Selection Process

The board discussed the drug selection process. See previous meeting notes for details on the process. However, board members changed their votes between the meetings, which adjusted the rankings. The board has new lists of specialty and non-specialty drugs that are ranked for affordability review. The board will look at these two shortlists to pick drugs for affordability review.

The board is the process of building a website dashboard to allow the board to look at data points on drugs. Staff gave a demonstration on the use of the dashboard. The dashboard will be available to the public.

Discuss Drug Selection Recommendation Strategy

(Advisory group members each select five drugs to recommend to the board)

Advisory members engaged in discussion of potential missing information and duplication of drugs because of different dosages in the lists. Advisory board members were asked to submit questions and lists of suggested drugs for affordability reviews with reasonings.