State Drug Price Caps Fail to Lower Patient Costs and Threaten Rare Disease Access, New RAAP Study Finds
核心洞察
A new RAAP policy study reveals that upper payment limits set by state Prescription Drug Affordability Boards have not reduced out-of-pocket costs for any patient as of mid-2026.
The analysis traces the pharmaceutical supply chain to show that UPLs cap reimbursement at the payer level, not patient cost-sharing, leaving savings stranded at health plans.
Rare disease patients face disproportionate risk, as supply chain disruptions could eliminate access to the only available treatment for their condition.
A comprehensive new policy study from the Rare Access Action Project (搜索) (RAAP) concludes that upper payment limits (UPLs) — the reimbursement caps being set by state Prescription Drug Affordability Boards (PDABs) — have failed to deliver a single dollar in savings to patients at the pharmacy counter, while simultaneously threatening access to therapies for the most vulnerable rare disease populations.
The study, titled "Follow the UPL," was researched and written by Jennifer Snow of Apteka Policy (搜索) and released on July 28, 2026. It traces the full pharmaceutical supply chain to explain why, despite years of state effort and significant public resources, UPLs have not achieved their intended goal of reducing patient out-of-pocket costs.
"States are right to focus on affordability, but policy solutions must work within the realities of how the supply chain actually operates," said Michael Eging, Executive Director of RAAP. "Our analysis shows that UPLs as currently designed do not lower what patients pay, and for those with rare diseases who already face limited options, these policies carry real risks of cutting off access to therapies with no alternative."
How UPLs Function — and Where They Fall Short
A UPL sets a ceiling on what payers can reimburse a pharmacy or provider for dispensing a specific drug. Critically, it does not cap the price of a product, nor does it guarantee that savings reach patients. As the study documents, the potential for disruption of patient access occurs at the patient access point, with pharmacies and providers potentially operating at a loss. Patients bear the risks of supply chain disruption without any financial benefit.
As of mid-2026, nine states have established active PDABs, with Colorado and Maryland becoming the first to set UPLs — on the arthritis biologic Enbrel and the diabetes drug Jardiance, respectively. Yet not a single patient has seen lower out-of-pocket costs as a result.
"When you follow the dollar through every layer of the supply chain, the picture becomes clear: a UPL is a reimbursement ceiling, not a patient savings guarantee," said study author Jennifer Snow. "The structural dynamics of how wholesalers, pharmacies, PBMs, and health plans interact mean that savings generated by a UPL do not automatically reach the people who need them most."
Supply Chain Consequences
The study identifies several mechanisms by which UPLs can destabilize the pharmaceutical supply chain. When a UPL creates economics that do not justify the operational complexity of state-specific chargebacks, supply chain participants may decline to stock the drug in that state. Pharmacies operating on margins already compressed by pharmacy benefit manager (PBM) reimbursement face further pressure, and providers administering drugs under a buy-and-bill model may face unrecoverable losses on every dose.
Federal Policy Conflicts
The analysis also highlights a significant federal policy conflict: if a state UPL falls below a drug's Medicaid Best Price, that UPL resets the rebate floor for every state's Medicaid program nationwide. A pricing decision made in one state can therefore increase Medicaid liability for manufacturers across all fifty states.
Disproportionate Impact on Rare Disease Patients
Perhaps the most concerning finding relates to patients with rare diseases. While patients with common conditions may have therapeutic alternatives if a supply chain disruption occurs, rare disease patients often do not. If a UPL causes a wholesaler to stop distributing a therapy or a manufacturer to exit a state market, a patient may lose access to the only treatment available for their condition.
The study also identifies what it terms the "single-indication trap": exemptions designed to protect rare disease drugs under both the federal Inflation Reduction Act and state PDAB frameworks strip away protection the moment a manufacturer seeks FDA approval for a second rare disease indication — even if that second indication is also for a rare disease. This creates a direct financial disincentive to expand access to additional rare disease populations.
Recommended Alternatives
Rather than pursuing UPL policies that risk supply chain disruption without delivering patient savings, the study recommends that states consider affordability strategies that work directly with supply chain economics. These include risk pooling and reinsurance programs that spread the cost of high-cost specialty therapies across a broader enrollment base, capped copay programs that set a direct ceiling on patient out-of-pocket costs, and restrictions on copay accumulator and maximizer programs that restore the intended value of manufacturer patient assistance.
"Policy success should ultimately be measured by whether patients can reliably access the treatments they need," Eging added. "Right now, the dollar stops at the health plan. States have an opportunity to pursue affordability solutions that strengthen, not disrupt, the systems patients depend on."
RAAP is a coalition of patient and life sciences stakeholders focused on exploring creative policy solutions to address structural issues in access and coverage, with a priority on ensuring rare disease patients have access to the care and treatments they need.