Maryland Drug Affordability Board Flags Two Diabetes Medications as Cost Challenges
Key Insights
Maryland's Prescription Drug Affordability Board unanimously determined that Jardiance and Farxiga pose affordability challenges to the state's healthcare system.
The decision marks the first completion of PDAB's cost review process and opens the door for potential upper payment limits to cap state spending on these medications.
The board cited rising wholesale acquisition costs above inflation rates and high out-of-pocket expenses as key indicators of affordability challenges.
Maryland's Prescription Drug Affordability Board (PDAB) unanimously determined Monday that two widely prescribed Type 2 diabetes (search) medications, Jardiance and Farxiga, likely pose "an affordability challenge for the state health care system," marking the first drugs to complete the board's comprehensive cost review process.
The preliminary determination allows the board to consider cost-reduction strategies, including the possible implementation of upper payment limits (UPLs) that would cap how much the state pays for these medications under state-funded health plans.
Cost Analysis Reveals Pricing Concerns
PDAB staff reported that both Jardiance (empagliflozin) and Farxiga (dapagliflozin) have seen their wholesale acquisition costs—the manufacturer's price when selling to wholesalers—rise higher than the rate of inflation, indicating a potential affordability challenge. The board also cited out-of-pocket costs for consumers and state and local spending on these drugs as additional indicators of affordability concerns.
"This board exists because we're watching the cost of prescription drugs escalate, and we had to get a handle on that pricing," said Del. Bonnie Cullison (D-Montgomery), who has been involved in PDAB-related legislation for years. She described the board's work as bringing light to the "black hole" of information surrounding drug costs.
Broader Drug Review Pipeline
The two diabetes medications were among six drugs selected for initial cost review, addressing conditions including Type 2 diabetes (search), heart disease (search), kidney disease (search), eczema (search), and Crohn's disease (search). The remaining four drugs—Dupixent, Ozempic, Skyrizi, and Trulicity—are still undergoing the review process.
Vincent DeMarco, president of the Maryland Health Care for All Coalition (search), called the preliminary decision a "really big deal" and an "important first step" in bringing down prescription costs for those on the state's health plan.
Implementation Timeline and Industry Concerns
Andrew York, the board's executive director, cautioned that while the determination represents "an important milestone," it is "not a final step," and the state may not see immediate savings on these medications.
The pharmaceutical industry has raised concerns about potential access implications. Derek Flowers, president of the Value of Care Coalition (search), urged the board to "engage clinicians more meaningfully, evaluate real-world consequences of UPLs [upper payment limits], and more importantly, consider non-UPL strategies that lower costs while improving health outcomes."
Board's Evolution and Future Authority
Created by the General Assembly in 2019, PDAB faced initial delays due to a veto from former Gov. Larry Hogan amid pandemic-induced economic uncertainty in 2020. Gov. Wes Moore allocated funding for the board's operation in 2023, allowing it to establish its cost review process.
Maryland lawmakers this year approved legislation that will expand PDAB's cost reduction efforts to commercial health plans, not just state plans. This expansion will take effect one year after the board successfully implements upper payment limits on two drugs.
Board members emphasized that upper payment limits represent just one tool among many potential cost-reduction strategies and that they are not required to set limits if doing so would impede access to medications.