Alerts That State Drug Price Caps Do Not Reduce Expenses for Patients and Endanger Access for Those with Rare Diseases

Follow the UPL tracks the complete pharmaceutical supply chain to illustrate why upper payment limits leave patients without relief.

The Rare Access Action Project (RAAP) has issued a new policy analysis titled Follow the UPL examining why upper payment limits (UPLs) - the reimbursement caps established by state Prescription Drug Affordability Boards (PDABs) - fail to cut costs for patients at the pharmacy counter and why those with rare diseases face the greatest risks.

As states seek solutions for prescription drug expenses nine have formed active PDABs with Colorado and Maryland first to implement UPLs on the arthritis biologic Enbrel and the diabetes drug Jardiance respectively. The analysis prepared by Jennifer Snow of Apteka Policy follows the entire pharmaceutical supply chain to demonstrate why despite extended state work and substantial public investment no patient has experienced reduced out of pocket costs from a PDAB established UPL.

A UPL creates a maximum on what payers may reimburse a pharmacy or provider for a given drug. It does not limit the product price and it does not ensure savings reach patients. The analysis shows that potential access issues arise at the patient point of service where pharmacies and providers may incur losses. Patients face supply chain interruptions without any financial gain.

States correctly target affordability yet policy measures must align with actual supply chain operations said Michael Eging Executive Director of RAAP. The review indicates UPLs in their present form do not decrease patient payments and for rare disease patients who already encounter restricted choices these measures introduce genuine threats of blocking therapies that have no substitutes. Affordability efforts should reduce patient costs without undermining the supply chain patients rely upon.

RAAPs analysis emphasizes several main conclusions:

Extended work yields no patient savings: Through mid 2026 no patient has paid less at the pharmacy counter due to a PDAB set UPL. The review outlines three detailed supply chain cases to clarify why a UPL limits reimbursement at the payer stage not cost sharing at the patient stage.
Supply chain effects: When a UPL produces economics that do not support the operational demands of state specific chargebacks supply chain members may choose not to stock the drug in that state. Pharmacies already operating on tight margins from PBM reimbursement encounter added strain and providers using a buy and bill model may sustain unrecoverable losses on each dose.
Federal policy tensions: If a state UPL drops below a drugs Medicaid Best Price that UPL establishes the rebate floor for every states Medicaid program nationwide. A pricing choice in one state can raise Medicaid obligations for manufacturers in all fifty states.
Greater effect on rare disease patients: Patients with common conditions may find alternatives during a supply chain issue. Rare disease patients frequently cannot. If a UPL leads a wholesaler to halt distribution or a manufacturer to leave a state market a patient may lose access to the sole treatment for their condition anywhere.
The single indication issue: Exemptions meant to shield rare disease drugs under both the federal Inflation Reduction Act and state PDAB rules lose effect once a manufacturer pursues FDA approval for a second rare disease indication even if that indication is also rare. This creates a direct financial barrier to expanding access for additional rare disease groups.

The analysis author Jennifer Snow noted When the dollar is tracked through each stage of the supply chain the outcome is evident a UPL serves as a reimbursement ceiling not a patient savings assurance. The built in interactions among wholesalers pharmacies PBMs and health plans mean savings from a UPL do not automatically reach those who need them most. States seeking to lower patient payments have stronger options available measures that channel savings directly to the pharmacy counter.

Instead of advancing UPL policies that risk supply chain issues without providing patient savings the analysis advises states to examine affordability approaches that align with supply chain operations risk pooling and reinsurance programs that distribute the cost of high cost specialty therapies across a wider enrollment base capped copay programs that set a direct limit on patient out of pocket costs and limits on copay accumulator and maximizer programs that restore the value of manufacturer patient assistance. Each method aims to ensure savings reach the patient.

Policy success should ultimately be judged by whether patients can consistently obtain the treatments they require Eging added. At present the dollar ends at the health plan. States can pursue affordability solutions that reinforce rather than interrupt the systems patients depend on.

RAAP the Rare Access Action Project is a coalition of patient and life sciences stakeholders that develops creative policy solutions to address structural issues in access and coverage. The focus is to help ensure rare disease patients obtain the care and treatments they need.

SOURCE Rare Access Action Project (RAAP)