PDABs: A Threat to Ending the HIV Epidemic?

By: Ranier Simons, ADAP Blog Guest Contributor

****Blog original published on June 18th and reprinted with permission from the Community Access National Network****

The Community Access National Network (CANN) continues to be active in the advocacy and policy space concerning Prescription Drug Advisory Boards (PDABs), also known as Prescription Drug Affordability Boards. PDAB activity is growing and advancing. Not only are more states considering or working through PDAB creation legislation, but a few recent drug-specific advisory board decisions have already been made. 

Photo Source: CANN

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A previous blog post untangles the warnings and concerns regarding PDABs. On the surface, they are presented as a simple solution to a complex issue. The complex problem is the extremely high healthcare expenditure in the United States. Accessing modern healthcare results in high amounts of spending from costs associated with hospitals and other facilities, medical technology creation and utilization, and even prescription drugs. Although prescription drug expenditures are only a small part of the billions spent annually on healthcare, the price of prescriptions is the low-hanging fruit that PDABs aim to attack. The money patients pay for prescription drugs is assuredly a financial burden for many. However, while PDABs aim to expressly lower the direct cost of prescription drugs for patients, their trajectory does not achieve that goal. Their actions have the potential to cause access issues in addition to potentially increasing out-of-pocket costs to consumers. This is especially true since the primary means PDABs lean toward to lower costs is the upper payment limit. Moreover, while CANN has a focus on PDAB potential outcomes regarding HIV drugs, all drugs are of concern, given that people living with HIV (PLWH) have multiple co-morbidities. Any threat to any drug utilized by vulnerable chronic disease communities is a threat to all.

Currently, CANN is monitoring several states that are looking to activate boards or already have active boards. Those states are Colorado, Maine, Maryland, Minnesota, New Hampshire, New Jersey, Ohio, Oregon, and Washington. Attending virtual PDAB meeting sessions, engaging by contributing both written and verbal commentary/testimony, and communicating with nationwide advocacy partners have revealed trends and developing paradigms that are problematic. Currently, the PDAB that is most far along in processes is Colorado. They have already deemed two medications, Enbrel and Cosentyx, as unaffordable, thus making them eligible for a UPL. Although every state’s PDAB is different operationally, due to the language of the legislation they are created by, states are watching Colorado. They will watch each other and potentially network in the future.

A sweeping, troublesome focus of PDABs is price. The stated intent of PDABs is to reduce the out-of-pocket costs patients pay for prescription drugs. However, the focus of analysis and discussion is how much manufacturers charge for drugs instead of how much patients pay. Focusing on drug prices could potentially lower the costs of drugs for the system, i.e., health plans, sponsors, and payers, but that does not directly help the patient cost burden.

A UPL sets a limit on the reimbursement rates of entities such as state health plans. It does not directly affect what patients pay out of pocket or change what manufacturers charge for drugs. A recent board discussion revealed the thought process that a UPL would equal more drug pricing transparency, eliminate hidden price variation caused by opaque rebates and discount structures, and increase patient access. Additionally, an assumption with consensus was that a lower price via UPL suggests an insurance company would be less likely to put a drug on a higher tier, less likely to require prior authorizations and be a barrier to pricing issues caused by payer vertical integration. These thought processes are not sound.

Photo Source: CANN

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A UPL does not automatically lower the price of a drug. It has no bearing on what a manufacturer charges for a medication. A manufacturer would have to voluntarily lower its price to be at or near the UPL. Additionally, if a UPL were set to be lower than the acquisition cost for pharmacies, pharmacies would lose money stocking medications. They cannot operate at a constant loss which lowers patient access since some pharmacies would have to stop carrying certain medications. If a pharmacy can’t fill a prescription, patients are put at risk due to treatment interruptions or even treatment cessation. Deliberations on boards proceed with the assumption that a UPL would not hinder access, with no discussions of contingency plans or safeguards to guard access against unintended consequences. Unfortunately, the prevailing attitude is that loss of access to medications as a result of UPLs is an unwarranted fear. 

UPLs also threaten the 340B Drug Pricing Program. The value of 340B is found in the spread between reimbursement rates and a reduced acquisition cost by way of drug manufacturer 340B rebates. UPLs will significantly reduce reimbursement rates, devaluing the funding realized by 340B rebates. Taking dollars out of the 340B program means that entities benefiting from 340B rebates will lose the ability to provide services to the vulnerable communities they serve. Furthermore, state AIDS Drug Assistance Programs (ADAP) heavily depend on savings and revenues from the 340B program. For states like Michigan, New Jersey, and Oregon, roughly 70 percent of their state ADAP budgets comes from 340B funding, and Oregon doesn’t receive any state contribution. According to NASTAD, a majority of ADAP clients live at or below 300% of the Federal Poverty Level. Thus, even if they qualify for Medicaid, they still need assistance.

Photo Source: CANN

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In reality, insurance plan benefit design is what directly translates into what patients pay out of pocket. The convoluted utilization of tools such as copays, coinsurance, high cost-sharing tiers, and copay accumulators directly determines direct patient expenditures. Most importantly, a drug’s price doesn’t determine the utilization management techniques an insurance plan uses. Many different factors are at play there, and those factors benefit many parties but not patients.

Drug manufacturers have patient assistance programs (PAP) that actually directly lower consumer out-of-pocket costs. One type of PAP is copay assistance programs that help pay most or all of the copays patients pay for medications due to their insurance plans. Another type of PAP is where a manufacturer will provide medications entirely for free for those who are uninsured, underinsured, those whose insurance does not cover a particular medication, or those who cannot afford their copay or coinsurance while not qualifying for other help. 

Although PAPs directly facilitate low out-of-pocket costs and bolster access, they are deleteriously used to support UPLs in PDAB board deliberations. The circular argument is that the mere existence of PAPs indicates that manufacturer drug pricing is too high. Additionally, discourse hints at the sentiment that PAPs are self-serving to drug manufacturers because it enables them to enjoy considerable tax advantages under the guise of charitable giving. As Jen Laws, CEO of Community Access National Network, points out, drug manufacturers have PAPs because “they are being made to shoulder discriminatory, profit-driven plan designs and supplement the under-reimbursement issue, all while patients are subject to predatory practices by payors.” 

PDABs, those currently active and those that are upcoming, are well-intentioned in wanting to lower drug pricing for consumers. They state that when identifying drugs they deem are unaffordable for consumers, they will consider other ways to reduce costs besides just the UPL. However, although things such as PBM reform and effecting policy change regulating insurance plans are superior options, the UPL remains the de facto consideration. It is essential that patients learn about and stay aware of PDAB activity. Above all, it is imperative that patients engage with PDABs because they are not receiving enough feedback from consumers and caregivers. Their deliberations are based on minuscule sample sizes of survey responses and low turn-out, with opportunities for in-person or virtual commentary from the public.

Boards feel as if they are aggressively seeking patient engagement but aren’t receiving it. Regardless of the veracity of PDAB's efforts to obtain robust patient-centered data, it is imperative that patients and caregivers stay informed and intentionally make their voices heard. Being vocal and active does make positive change happen. As a result of education efforts from patient advocacy groups and FQHCs regarding the damage of UPLs on 340B funding, this week, Oregon’s PDAB decided to revamp its entire affordability review process. CANN is committed to continued education, engagement, and advocacy to empower patients individually and collectively, irrespective of medical condition.

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Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.