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Maryland created a Prescription Drug Affordability Board to rein in prices

: [POST-BROADCAST CORRECTION: This story incorrectly identifies Jane Horvath as a health policy analyst at the Commonwealth Fund. She is an independent health consultant on state drug issues who has done work for the fund.]

STEVE INSKEEP, HOST:

Pharmaceutical companies keep raising prices. The costs are hitting patients, sometimes forcing them to pay thousands of dollars for medications. The state of Maryland wants to keep drugs affordable, and WYPR reporter Scott Maucione has more.

SCOTT MAUCIONE, BYLINE: Larry Zarzecki has Parkinson's disease, and the out-of-pocket costs for his drugs over the last three years reached about $100,000.

LARRY ZARZECKI: I totally went through an IRA that I had, and I had to sell my house.

MAUCIONE: Zarzecki is one of the 25% of Americans who have trouble affording prescription drugs due to high out-of-pocket costs. It's estimated that Americans spend an average of $1,300 a year on prescription drugs, but some medications can cost tens or even hundreds of thousands of dollars. In 2019, Maryland became the first state to legislate a Prescription Drug Affordability Board in an attempt to rein in prices, and now the board is preparing to undertake its work in earnest. It's now going through a public comment period to solidify the way it will review drugs. Rachel Sachs is a professor of health law at Washington University in St. Louis.

RACHEL SACHS: The idea is for states to think about what a fair price would be that can increase access to these drugs for patients within the state.

MAUCIONE: The Maryland Legislature gave the board the authority to set upper price limits, a solid monetary top line that insurers in the state will not pay more than for a specific drug. Maryland's Drug Affordability Board will conduct cost reviews of drugs that seem too expensive - for example, generic drugs that increased in price by 200% over the last year, generic drugs that cost more than a hundred dollars a month or brand-name drugs that launched at $30,000 or more a year. During the review, the board will look at 10 factors, like available discounts, alternatives to the drug and cost to health plans. Andrew York is the executive director of Maryland's Drug Affordability Board.

ANDREW YORK: Then there's the ultimate determination of after a drug undergoes a cost review, they make the determination of if it causes an affordability challenge or not.

MAUCIONE: Jane Horvath, a health policy analyst at the Commonwealth Fund, says negotiations are common in medicine.

JANE HORVATH: Nobody pays what they are charged. Health insurers establish payment rates for what they will pay a hospital for a certain procedure or a certain illness. Insurers will set rates for what they'll reimburse pharmacies for for generic drugs, for instance. A prescription drug affordability board builds on those models that already exist at the state level.

MAUCIONE: Other states are now catching on. Six states, including Colorado and Oregon, now have their own boards but have still yet to perform cost reviews. However, not everyone thinks the boards will help patients. Priscilla VanderVeer is the vice president of public affairs at Pharmaceutical Research and Manufacturers of America.

PRISCILLA VANDERVEER: Any time that a board of government officials make unilateral decisions about people's health care, it can create a situation where you have people making choices and coming between the decisions between a doctor and a patient.

MAUCIONE: For now, Larry Zarzecki, who has Parkinson's disease, says he's taking advantage of the new drug rebates and coupons that companies are offering to make ends meet.

ZARZECKI: It began a really positive change in the way prescriptions are being looked at. It's allowed me to afford to buy my two grandsons Christmas presents this year.

MAUCIONE: He says that's a big increase in his quality of life.

ZARZECKI: It was the first time since I can remember that I've been able to really enjoy Christmas with them.

MAUCIONE: Zarzecki says he hopes the affordability board will provide better drug pricing for all Marylanders who are struggling with high medication costs. Maryland's prescription board is planning on conducting its first cost reviews this fall.

For NPR News, I'm Scott Maucione. Transcript provided by NPR, Copyright NPR.

Corrected: April 30, 2023 at 11:00 PM CDT
This story incorrectly identifies Jane Horvath as a health policy analyst at the Commonwealth Fund. She is an independent health consultant on state drug issues who has done work for the fund.
Scott Maucione