PDAB Implementation Challenges Slow State Drug Cost Efforts

As lawmakers tackle the affordability agenda this session, Prescription Drug Affordability Boards, or PDABs, have emerged as a key debate among several states attempting to rein in prescription drug costs. The issue was especially prominent in Virginia this year, where bipartisan legislation was vetoed by Governor Abigail Spanberger (D), who argued that similar efforts in other states have not achieved the goal of lowering prescription drug costs and have been expensive undertakings.

Defining Key Terms

Nine states currently have PDABs or similar drug pricing entities, generally tasked with addressing prescription drug costs for the state and consumers. Authorities vary by state, but the most consequential PDABs are those that can conduct affordability reviews on eligible high-cost drugs and set upper payment limits (UPLs) on those they have determined to be unaffordable in the state.

PDABs in Maryland, Colorado, Washington, and Minnesota have such authority, and their experience has emerged as a valuable consideration for states considering similar measures. MultiState closely monitors PDAB activity, and as a result, I have attended hundreds of hours of PDAB meetings, gaining insight into how these boards function operationally and the practical challenges that have shaped implementation efforts. PDABs present an interesting lesson for policymakers in that passing legislation is often just the beginning, and complex implementation procedures can play a significant role in determining the success of a measure.

Implementation Challenges Facing Prescription Drug Affordability Boards

Board Construction and Staffing Obstacles

Across the board, PDABs consistently require significant effort to build out their infrastructure and processes. From a board construction process, board members are often appointed by governors and legislative leadership, and appointments or vacancies can take months to process. In addition, building out administrative functions has proven to be a challenge for some states. Notably, in Minnesota, the PDAB's early work was severely hampered by a lack of an executive director. The PDAB was required to conduct the hiring process publicly, ultimately leading to a series of open meetings to approve position criteria, hiring procedures, and candidate interviews. The process took multiple months and was further extended after the first round was unsuccessful in yielding a hiring decision. Even after initial staffing is established, maintaining operational capacity has also presented an ongoing challenge for some PDABs, notably in Maryland, where the PDAB staff was not at full capacity for most of the past year, which board members frequently factored into decisionmaking, with the PDAB often prioritizing certain activities in consideration of staff capacity.

Regulatory Framework Development Delays

Beyond board organization, the PDAB process requires the board to develop regulatory and methodological frameworks to identify eligible drugs, select drugs for review, and conduct reviews. In several states, this process has taken up to a year as the complex methodologies often require comprehensive stakeholder input and board discussion (all of which must take place in open meetings), while regulations establishing PDAB procedures must go through the formal rulemaking process. This is evidenced by current activity in Washington and Minnesota, which have been working through this process and have yet to conduct affordability reviews on any drugs, though the PDABs were enacted in 2022 and 2023, respectively.

Drug Review Process Complexity

Once operational, the drug selection and affordability review process is complex and intensive. After the board builds out frameworks, board members must parse through hundreds of eligible drugs and corresponding data and evaluate which drugs they want to conduct affordability reviews on. Affordability reviews allow the PDABs to do an even deeper dive into the data, often requiring additional requests for information from stakeholders, consultation with clinical contractors, and data retrieval from recognized sources. In short, the PDABs are reviewing a substantial volume of complex technical data and information in the review process. Of note, Maryland selected six drugs for review in May 2024 and has completed three cost review studies to date, with additional reviews still pending. The final reports for the completed studies average over 170 pages, with multiple attachments containing additional data.

Upper Payment Limit Implementation Timeline

Even after affordability reviews are completed, UPL implementation has also proven to be a lengthy process. In Colorado, rulemaking for its first UPL was scheduled to start in January 2025, but faced several delays. Of note, staff identified a data categorization issue that required the PDAB to review validated data and reaffirm prior affordability determinations before proceeding with rulemaking. Furthermore, the rulemaking process occurred over four separate, hours-long rulemaking hearings to evaluate data and receive stakeholder testimony. Colorado eventually finalized its first UPL in October 2025. However, the UPL is not scheduled to take effect until January 2027, in order to provide time to implement contracting and reimbursement changes. Colorado has also faced litigation challenging its authority and process, further adding time and complexity to implementation.

State Legislative Responses to PDAB Effectiveness Concerns

Collectively, the experience of existing PDABs demonstrates the complexity of their implementation, shifting the debate around PDABs beyond policy and into questions of operational feasibility. This dynamic has increasingly influenced legislative outcomes. Notably, debates on PDAB effectiveness and budgetary concerns ultimately led to the repeal of New Hampshire’s PDAB last year, which was tasked with determining spending targets for specific drugs for public payers.

This session, Louisiana’s legislature passed a more limited approach than the traditional PDAB model by focusing on transparency and reporting functions, while an effort in Illinois failed to pass before the end of regular session. At the same time, it is important to note that no UPL has yet taken effect, and the broader debate could ultimately shift depending on the outcome of UPLs and whether PDABs deliver on their promise of generating savings. As existing PDABs move closer to implementation, lawmakers in other states will be watching closely to assess whether the potential savings generated by PDABs justify the significant effort required to implement them.

Track Health Care Policy

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