The Maryland Legislature's Approval of a Prescription Drug Affordability Board And What It Means

Last week, the Maryland legislature concluded its 2019 session. As a part time legislature, they only meet for three or four months per year, and this results in a whirlwind of activity. But before the legislators adjourned, they passed an important bill that will lower drug prices: they approved the establishment of a Prescription Drug Affordability Board that could cap payments for extremely expensive medicines.

The struggle was not easy. Many drug companies lobbied against the bill, which would establish the Board and give it the power to set upper payment limits for state, local, and and county government payors who purchase drugs. This measure is the first of its kind in the nation, and the fight to pass it was led by Vinny DeMarco, a public health advocate and lobbyist who has successful organized on behalf of many issues. Rising drug prices have led to many Marylanders have to choose between paying for their medicines and paying for basic expenses, and this is unjust and unsustainable.

The bill is careful and deliberate, and takes time to go into effect. The Prescription Drug Affordability Board will study the entire pharmaceutical distribution system and payment system, and submit findings and recommendation to the Maryland Senate Finance Committee and the House Health and Government Operations Committee. It will identify situations where prescription drug costs are unaffordable for patients, identify its data sources, and produce annual reports on drug prices for both Committees. After that, if the Board deems it necessary, it can draft and submit a plan on how to impose upper payment limits for certain drugs.

And when all that is finished and if the Maryland General Assembly approves the plan, the Board can begin to set upper payment limits for prescription drugs that are bought by state, local, or county governments. This includes state hospitals, government employee programs, corrections, and Medicaid. And anyone who is aggrieved by the Board's decision can appeal that decision. The Board's decisions will cover about 250,000 people, and only apply to drugs that cost $30,000 or more or that see substantial price hikes in a 12-month period. Private insurers will be unaffected.

But it is not a done deal. The bill now goes to Governor Larry Hogan, who will either approve or veto the proposal. The Prescription Drug Affordability Board is a good idea that will rein in prices for the most expensive drugs and ensure that taxpayers get the best value for their money. We hope that Governor Hogan signs the measure, that other states follow Maryland's example, and that drug manufacturers and PBMs also take steps to lower costs.