Minnesota is the seventh state to establish a board to assess prescription drug affordability.
Following in the footsteps of Colorado, Maine, Maryland, New Hampshire, Oregon and Washington, Minnesota has established a Prescription Drug Affordability Board (PDAB).
Tony Lourey, Nemadji CEO, has been appointed as chair of the board that includes seven voting members appointed by Governor Walz, one nonvoting member appointed by the majority leader of the senate and one nonvoting member appointed by the speaker of the house.
“Pharma has been taking a bigger and bigger piece of the healthcare pie for far too long. They are driving insurance rates higher, insurance rates that all of us pay. It ripples through the entire economy,” shared Lourey. “One of the things I often say is that I’m a businessman—I believe in the power of market—but I also believe you shouldn’t take more out of a marketplace than the value you bring. There’s no question they bring value, but they extract more than they bring.”
Lourey’s experience chairing and finding solutions to complicated problems, positive relationship with the Attorney General’s office, long history of working with the press, understanding of how legislature operates and his legal background will be advantageous in rounding out the diverse skillset of the group.
Minnesota History
In 2019, Minnesota Attorney General Keith Ellison formed a task force to lower the cost of prescription drugs.
Regarding their mission, a quote from Ellison on his website states, “As the People’s Lawyer, I’ve heard from people in every corner of Minnesota that they’re having trouble affording their lives—and the cost of prescription drugs is a major factor in that. They’re all united in one simple idea; they’re entitled to afford their lives—and the drug prices are too high.”
In 2020, Ellison’s task force published their report laying out recommendations for lowering pharmaceutical drug prices. The PDAB is one of the primary strategies put forth by the task force.
Current Push
Last summer, Minnesota launched several initiatives related to RX Affordability.
- Technical fixes to existing Rx transparency reporting (effective July 1, 2023)
- Reporting expansion: drugs of public interest and additional supply chain entities (to begin early 2024)
- Prescription Drug Affordability Board (PDAB) (established January 1, 2024)
- 340B covered entity reporting (beginning April 2024)
- Prohibition of excessive price increases for generic drugs (July 1, 2023)
- Cost-sharing limits for chronic disease Rx treatments (beginning January 1, 2025)
The Minnesota PDAB was officially established January 1, 2024 as planned, and is authorized to conduct cost reviews of prescription drug products and set upper payment limits—something not all PDABs are allowed to do.
An upper payment limit (UPL) caps the price a prescription drug can be purchased or reimbursed for by health plans, based on the board’s assessment of a reasonable price.
Efforts Across The Country
The ten existing boards that are responsible for assessing the affordability of drugs all function a bit differently.
Colorado, Maine, Maryland, New Hampshire, Oregon, Washington and now Minnesota all have PDABs. Their primary function is to review and determine if states should take action to reduce the cost of prescription drugs.
Currently, Colorado’s PDAB can set upper payment limits for 12 drugs in the first three years of its existence, with the option to increase to 18 if the board determines a need. Washington is also limited to 12 drugs while Maryland has UPL power pending legislative appeal.
The Maine, New Hampshire and Oregon PDABS have no authority over upper payment limits.
New York and Massachusetts have a slightly different approach, both implementing drug utilization boards that are granted the ability to negotiate state drug payments. Ohio is home to the Prescription Drug Transparency and Affordability Advisory Council.
Legislation has been introduced to create PDABS in Arizona, Connecticut, Illinois, Michigan, New Jersey, New Mexico, Rhode Island, South Carolina, Vermont, Virginia and Wisconsin.
What’s Next?
“We need a whole set of tools to bring about accountability and transparency to a really complicated and opaque process that has been used against consumers, businesses and other players in the healthcare world for far too long,” said Lourey. “I’m hoping we can bring some of that accountability, transparency and reasonable pricing to benefit Minnesotans.”
With their first meeting in the rearview mirror, the members of the PDAB have a lot of work ahead of them—including laying out bylaws and a code of conduct, adopting a budget, and developing methodology and criteria around how to approach the selection of drugs to be evaluated.
Lourey is confident in the board’s ability to execute. “The makeup of the board is incredible—the rare disease advocacy community is well represented and there are brilliant researchers from the University of Minnesota that hold decades of experience on leading state and national pharmaceutical pricing and economies.”
