(Source: MIRS.news, Published 10/04/2023) Legislation creating a Prescription Drug Affordability Board (PDAB) – composed of five Governor appointees and counseled by industry stakeholders – passed in the Senate Wednesday on 20-17 party-line votes.
Sen. Mark Huizenga (R-Walker), who personally works as a healthcare consultant advising on new biologic drug developments and their delivery cycle, abstained from voting on all PDAB-related items.
"Too many people in our state are having to choose between affording food and the medication that they need. Too many people are having to ration their medicines or skip doses because their prescriptions are just too expensive, resulting in some very frightening and avoidable health outcomes," said Sen. Darrin Camilleri (D-Trenton), a lead sponsor of today's legislative package.
He said that, with boards already reviewing water and utilities all across the state and country, it's time to ensure there's a "nonpartisan review process" in Michigan, responsible for making sure life-saving medications are "truly accessible to everyone."
Altogether, SB 483 , SB 484 and SB 485 would be responsible for focusing on one or more prescription drug products – meeting a specific criterion laid out in the legislation – starting 18 months after the legislation becomes effective.
It could be a brand-name drug or biologic with a wholesale acquisition cost (WAC) of $60,000 or more annually, following inflation-related cost adjustments. Additionally, they could focus their resources on a biosimilar drug product with a WAC that's not at least 15% less expensive than the brand-name product it's referring to.
Biologic or brand-name drugs experiencing at least a $3,000 WAC increase over a 12-month period, following inflation price updates, could be taken up by the board, as well. It could also review any prescription drug product "that may create affordability challenges for health care systems in this state and patients, including, but not limited to, a prescription drug product needed to address a public health emergency," according to the legislation's language.
A PDAB would have the noteworthy authority to establish an upper payment limit (UPL), essentially capping how much a drug product can be purchased, reimbursed or billed for by a third-party payer or product purchaser.
Third-party payers consist of anyone involved in managing health care expenses and drug reimbursements, and the UPL would have effects throughout the supply chain, like on pharmacy purchasers responsible for overseeing drug inventory.
The UPL element has been targeted in disputes over the legislation. For example, organizations like the Michigan Chamber of Commerce claim a PDAB could hinder a company's ability to raise capital for researching, developing and commercializing new medication therapies in Michigan.
According to the Chamber in a Sept. 27 opposition letter, "Government-imposed price controls on select medications do not reflect the reality of the market. Vital research will go unpursued."
"If manufacturers really are motivated by greed, as has been alleged, such companies will choose to limit or prohibit sales in Michigan in response to the board's mandates because they will neither innovate nor sell at a loss, which would then make these drugs less available to Michiganders," said Sen. Lana THEIS (R-Brighton) in her no-vote explanation.
During her remarks, Theis spoke about Sabrina WALKER, a 35-year-old woman in Denver with cystic fibrosis, a currently incurable disorder damaging the lungs and digestive system, which can be fatal and appears in less than 200,000 American cases annually. In July of this year, Walker had a column published on how Colorado's PDAB should refrain from placing price caps on orphan drugs treating rare diseases, expressing concern about how doing so could suppress innovation and deprive “rare disease patients of potential breakthrough therapies.”
According to Avalere Health – a Washington, D.C.-based health care consulting firm – Colorado flagged more than 600 drug products in June for potential review in its PDAB's UPL process.
“Even on her good days, she spent hours doing breathing treatments just to survive, but after starting a new breakthrough, innovative medication just four years ago, her life changed. Since then, she's been hospitalized only once in the past four years. She uses the time she had spent doing breathing treatments for her full-time job, and she's taken up running,” Theis said, describing Walker's story. “Now, she fears she will lose access to her life-changing medication because of her state's prescription drug affordability board, by establishing these artificial limits there's a good chance that drug will simply not be sold in Colorado at all.”
Theis introduced an unsuccessful amendment to SB 483, placing the associated costs of manufacturing a drug on the list of considerations the board must review when determining a UPL.
"It takes years and an awful lot of money to create these drugs, and it's certainly something that should be a consideration when you're deciding what it should cost," Theis said, before her amendment failed by a party-line vote, 20-17.
Other failed amendments included one by Sen. Jim Runestad (R-White Lake) to prohibit the Governor from appointing an individual to the board if they have made a personal political contribution to them. The Senate Minority Leader Aric Nesbitt (R-Lawton) – who views SB 483, SB 484 and SB 485 as "simply a copy and paste from other states that haven't seen any real savings for patients" – unsuccessfully called for the legislation to have a three-year sunset.
However, Democrats and Republicans came together to adopt an amendment by Runestad barring a board appointee from registering as a lobbyist in Michigan for a five-year period after serving on the panel.
"My, what a surprise," Runestad said after his lobbying-related amendment saw essentially unanimous approval – the first legislative item he had approved this term.
Before voting on SB 483, SB 484 and SB 485, Sen. Kristen McDonald Rivet (D-Bay City), the sponsor of SB 485, told how many of her family members are affected by a genetically autoimmune disease, such as herself. One of her many monthly medications comes with a $4,000 copay, she said.
McDonald Rivet also said she watched her mother die, in part because she could not afford all of her necessary medications on a fixed income.
Out of the eight states with PDAB statutes, five of them, as of August, possess provisions related to UPL price limit thresholds, consisting of Colorado, Maryland, Washington, Oregon and Minnesota.
"You're seeing other states all over the country set these up out of pure frustration of nothing happening," McDonald Rivet told members of the media following today's votes. "The reality is we have to do something, and we would love for Congress to act in a very big way, but in that absence, it's incumbent upon the states to take action and this is our first best shot at trying to get our arms around this problem."
