Consumers sound alarm: state price controls will limit access without lowering patient costs
A new survey demonstrates that a majority of consumers want health plans to lower out-of- pocket costs, but are concerned state government price controls will harm access and not reduce costs
Key Takeaways
❖ 86% of surveyed U.S. adults expressed concern that Prescription Drug Affordability Board (PDAB) officials will make decisions that limit the treatment options
available to them, potentially overriding their doctors’ recommendations.
❖ More than 80% of respondents expressed concern about administrative hurdles to getting needed medicines and were concerned they would need to try another
medicine before receiving the one prescribed by their doctor.
❖ Nearly 80% of respondents would be willing to pay more in premiums for a plan that provides greater access to medicines and out-of-pocket cost certainty.
Introduction
Growing evidence suggests that prescription drug coverage in the private market is becoming more restrictive.¹ Patients are finding it harder to access the medicines prescribed by their doctors and insurers often require them to pay more in out-of-pocket (OOP) costs at the pharmacy counter.² Rather than prioritizing a cap on patient OOP costs, some states have enacted price controls on innovative medicines to limit their health expenses.³ There is evidence that this approach does not save money for patients because health plans are not required to place price controlled medicines on the lowest-tier formularies with no or low cost-sharing.⁴ It is also likely to compound the access barriers patients already are experiencing, meaning many people in need of care will not be able to get the medicines their doctors prescribe, resulting in worse patient outcomes and higher health spending in the longer term.⁵
To date, eleven states have established Prescription Drug Affordability Boards (PDABs) and more are considering doing so.⁶ PDAB committees may limit allowable prices paid for medicines by state-regulated insurance plans, including Medicaid, state employee plans, or Affordable Care Act Exchange plans. There is concern that they may conduct value assessments for medicines that rely on incomplete and flawed cost-effectiveness analysis that omit patient and societal benefits. This could be exacerbated if these committees are staffed without clinical expertise or training in health economics and outcomes research.⁷
There are concerns that price control policies imposed by these PDABs do not require health plans to pass savings along to patients.⁸ Instead, access to price-controlled medicines is likely to be limited. This is due to several reasons including pharmacies may not be able to purchase a medicine for the cost set by the state, insurers are not required to cover those medicines on their formularies or insurers may limit access through utilization management.⁹ Pharmacy benefit managers (PBMs), who manage drug benefits for health plans, employers, and other payers, are incentivized to prioritize medicines for which they can negotiate steep discounts and therefore may opt to restrict coverage even for medicines that are price-controlled.¹⁰
Policies impacting drug costs and access can affect both premiums and OOP costs. Insurance premiums and OOP costs can be inversely related – lower premiums often mean higher OOP costs, shifting the financial burden to those of us who need care. This is further complicated as insurers and PBMs, can limit coverage and access through restrictive formularies, tiered pricing, utilization management (e.g., prior authorization, step therapy), and implementation of copay accumulators and maximizers.¹¹
Health plans with less expensive premiums typically either cover fewer services and treatments or charge people a higher proportion of the expenses OOP when they use that type of care. If a person does not anticipate using much medical care, they may prefer a lower-premium plan and take the risk of higher OOP costs if they need a type of care that is not covered or has a high co-pay. Conversely, a person who anticipates needing to use medical care more frequently or prefers not to have the risk of out-of-pocket costs may choose a higher-premium plan. However, in some instances a person has limited choice when purchasing a health plan, with up to one third of US counties only having one health marketplace insurer.¹²
In this context, No Patient Left Behind (NPLB) asked Charles River Associates (CRA) to conduct a survey to understand patients’ current and future concerns about access to medicines in commercial insurance plans through their employer or state health exchange (ACA) plans.
Methodology
An online survey was conducted between October and November 2024, gathering responses from 200 U.S. participants representing a diverse range of ages, incomes, ethnicities, and health statuses consistent with the Census statistics. The survey was constructed to capture a range of people who utilize medication to a greater or lesser degree and spent at least $100 OOP in the last year on prescription medicines. Respondents were asked questions across three themes. Specifically:
1. Recent experiences accessing medicines. For example, issues associated with eligibility or limitations on medicine choice. This included if the respondent had care rejected by their insurer, had to leave a prescription behind because it was not affordable, or if they had to change to a different medicine than their physician prescribed.
2. Impact of policies intended to limit spending on medicines. For example, the views of respondents on the impact of state government price controls may have on access to medicines. This included if they believed this would have an impact on access to medicines.
3. Willingness to improve the balance between premiums and OOP costs. For example, preferring higher premiums with lower OOP costs for their medicines, versus lower premiums and higher OOP costs.
Findings
Impact of PDABs
The survey revealed widespread concern regarding state policies designed to limit spending on medicines, specifically PDAB price controls.
Restricted access: 77% of respondents feared that price-control policies would restrict access to newer prescription medicines and reduce choice.
Impact on patient-doctor relationship: 86% of participants expressed concern that state officials will make decisions regarding drug pricing that could limit the treatment options available to them, potentially overriding their doctors’ recommendations.
Administrative hurdles: Respondents also expressed concern about additional administrative hurdles to getting needed medicines; 81% were concerned more paperwork would be required and 83% were concerned they would need to try another medicine before receiving the one prescribed by their doctor.
Access to Medicines
The survey also revealed significant challenges faced by respondents in accessing prescribed medications.
Medicine access: In the last year, 51% reported that the medicines prescribed by their doctor were denied by their insurance provider. Of those denied access, half (approximately 25% of the total respondents) were required to use an alternative medicine through a step therapy process, while 26% were unable to collect their prescribed medications due to their health insurer not covering the medicine.
Financial constraints: 64% of respondents reported that they had been unable to fill a prescription because they could not afford the OOP costs at the time, and 45% stated that their use of medicine had been affected because of high OOP costs. 94% of respondents expressing concern over affordability, while 88% worried that fewer medicines would be covered on drug plan formularies.
Higher costs: 66% of respondents believe that health insurance plans will make it more expensive for patients to obtain necessary treatments, contrasting with only 4% that expect any improvements in access.
Insurance Premiums
When it comes to tradeoffs in health insurance premiums, the survey found that nearly 80% (77%) of respondents would be willing to pay more for a plan that would provide greater certainty around access to medicines. On average, respondents were prepared to pay an additional $52 per month in premiums for such assurance, highlighting the importance of more reliable prescription medicine access.
Conclusion
The survey demonstrates that patients with commercial health insurance face significant challenges accessing medicines, but they are also concerned that current barriers to accessing medicines will worsen with state price-control policies. A substantial portion of respondents have experienced denials from their insurance plan, often leading them to switch away from medicines prescribed by their doctors or, in some cases, to receive no medication at all. Financial barriers, such as plans with high cost sharing, further exacerbate access issues.
Patients are concerned that PDABs and other state-level policies intended to limit spending on medicines will make it more difficult to obtain necessary treatments, override doctors' recommendations, and limit treatment options. Despite state-level concerns around affordability, there is a clear willingness among respondents to pay higher premiums for more reliable access to medicines.
While state policies aim to control medicine costs, the impact on patient access to necessary medications has not been taken into account. Policymakers should consider alternative proposals that seek to prevent PBMs and insurers from limiting coverage for medicines, including meaningful insurance reforms, such as capping OOP medicine costs at $2,000 per year or less which could support patients afford their treatments.
Transparency notice
Kirsten Axelsen is a senior policy advisor, and Milan Ferguson is a senior associate in the Life Sciences Practice at Charles River Associates (CRA). This was supported by No Patient Left Behind (NPLB). However, the conclusions, interpretations and opinions expressed herein are those of the authors alone.
About NPLB
NPLB is a coalition of biotechnology innovators, investors, healthcare professionals, and patient advocates working to ensure that patients have access to the medicines they need today and in the future. Through rigorous, independent research and data analysis, NPLB promotes biotech affordability and innovation, advancing common-sense solutions that enable every patient to afford the drugs prescribed by their doctor at low or no out-of-pocket cost — while also preserving the incentives for investment that spur the development of new, life-saving treatments. In tandem with its research efforts, NPLB educates leaders and stakeholders across the biotech ecosystem about thoughtful and balanced policy solutions. Learn more about NPLB’s latest initiatives at www.nopatientleftbehind.org.
References
1 U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. (2024). Prescription Drug Spending, Pricing Trends, and Premiums in Private Health Insurance Plans.
2 Ibid.
3 National Academy for State Health Policy. (2024). 2024 State Legislation to Lower Prescription Drug Costs.
4 HealthHIV. (2024). Prescription Drug Affordability Boards (PDABs) and Upper Payment Limits (UPLs) Impact on Patients, Drug Pricing, and Innovation.
5 Hwang, C. S., Lalani, H. S., & Rome, B. N. (2024). State Spending Targets for Prescription Drugs. In JAMA Health Forum (Vol. 5, No. 7, pp. e241663-e241663). American Medical Association.
6 Congressional Research Service. (2024). State Regulation of Prescription Drug Prices: Prescription Drug Affordability Boards and Related Litigation.
7 Office of Legislative Research. (2024). Prescription Drug Affordability Boards.
8 American Cancer Society Cancer Action Network. (2023). Prescription Drug Affordability Boards and the Impact on Cancer Care.
9 HealthHIV. (2024). Prescription Drug Affordability Boards (PDABs) and Upper Payment Limits (UPLs) Impact on Patients, Drug Pricing, and Innovation.
10 House Committee on Oversight and Accountability. (2024). The Role of Pharmacy Benefit Managers in Prescription Drug Markets.
11 Choi, D., Zuckerman, A. D., Gerzenshtein, S., Katsivalis, K. V., Nichols, P. J., Saknini, M. C., ... & Dusetzina, S. B. (2024). A primer on copay accumulators, copay maximizers, and alternative funding programs. Journal of Managed Care & Specialty Pharmacy, 30(8), 883-896.
12 Avalere. (2016). Experts Predict Sharp Decline in Competition across the ACA Exchanges.