State price-setting boards create more questions than answers

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The big picture: States are rolling out complex drug price-setting efforts—but there is no evidence yet that patients are or will save money at the pharmacy counter.

What’s new: Longtime supporters of state government price-setting and prescription drug board members themselves are raising concerns about how these policies are playing out and whether patients will benefit or if such policies will make it harder for patients to get their medicines.

State prescription drug board architects are uncertain about workability: “Maureen Hensley-Quinn, Senior Director of Coverage, Cost and Value at the National Academy for State Health Policy, said that even when states successfully cap what health plans pay, the complexity of the rebate system means it isn’t always clear whether those savings reach consumers,” according to Pluribus.

Prescription drug board members have echoed similar concerns. Dr. Sayeh Nikpay, vice-chair of the Minnesota prescription drug board, cautioned that lowering prices through upper payment limits (UPLs) would not guarantee affordability: “If you lower costs, there’s nothing to say that insurers aren’t going to increase your cost-sharing in the next year.” (MN prescription drug board meeting, 05/30/2024)

Patients have been vocal in their opposition to upper payment limits and government price-setting, like Jennifer Reinhardt, a mother to a child with cystic fibrosis in Colorado, who said that the Colorado prescription drug board is “…an experiment, and it’s really gross that they’re doing it on people who are really sick.” Reinhardt added that “the fact that many rare disease patients are alive today is a testament to the value of these treatments. We shouldn’t be forced to go the extra mile to educate [the board] on the value of a therapy, including its impact on long-term health and well-being. Yet proof of life isn’t always enough –the [board] could still decide that a medicine ‘isn’t worth it’ because it has higher costs and so few people are using it. It’s unkind to put families like mine—and the entire rare disease community—under that kind of stress.”

State health officials point to broader supply chain distortions that are impacting prices. Annalisa Steeber, of the Minnesota Department of Health, told Minnesota prescription drug board members that “...[what] patients and payers are paying is significantly higher than the price the manufacturer is setting.” (MN prescription drug board meeting, 07/23/2024)

Concerns have grown about advancing UPLs within the supply chain: In their policy recommendations for the 2025 annual legislative report, the Oregon PDAB Vice Chair Amy Burns recommended disbanding the board due to concerns about the board’s effectiveness and broader affordability and access issues. Although the Board did not adopt this recommendation, several board members raised related concerns, including fellow board member John Murray’s assertion that they “don't know how [a UPL’s] gonna ripple through the system. I worry about just attacking one part of the cost of the medication. Without addressing all the other areas where it goes.” (minute 33:30)

The bottom line: State bureaucrats promise savings through government price-setting policies like upper payment limits—but more often deliver more bureaucracy, higher administrative costs and disruptive supply chain impacts, with no clear evidence that patients will pay less.

The remedy: Focus on practical reforms—protect cost-sharing assistance and patient assistance programs, hold health plans and PBMs accountable to protect patients from discriminatory health plan features and ensure negotiated savings reach patients directly at the pharmacy counter.

Learn more at PhRMA.org/States.

Reid Porter

Reid Porter is senior director of public affairs at PhRMA, where he focuses on key policy priorities, member engagement and state media relations. He brings over two decades of experience leading communications and managing complex issues across the biopharmaceutical, technology and energy sectors. Porter holds a B.A. from Middlebury College, where he double‑majored in English and Spanish, and a graduate certificate in Publishing from Columbia University. Outside of work, he enjoys writing, traveling, cheering for the Green Bay Packers, playing and watching soccer, playing the violin, rereading Hemingway novels and spending time with family.

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Government Price Setting

State Policy