Stop the Michigan Prescription Drug Affordability Board
Michigan Legislation Could Reward Insurers and Hurt Patients
Michigan lawmakers are considering SB 483, a bill that would implement a so-called “Prescription Drug Affordability Board” (PDAB). This board, which consists of a group set to make decisions regarding drug prices, may sound ideal, but, in reality, it has terrible downstream effects as it will give greedy insurance companies another tool in their toolbox to deny claims and cut coverage of needed medicines for patients. Advocates and patients must do what we can to fight this legislation and call on Michigan lawmakers to put a stop to this bill.
Empowering The Expansion of Coverage Denials From Insurers
As many patients know, having health insurance does not guarantee their treatment costs will be covered, especially in light of billon-dollar insurance companies’ recent practices of using their wide discretion to deny coverage for treatments they supposedly deem not “medically necessary.” Data from a Kaiser Family Foundation study shows that about 1 in 7 claims for treatments are already rejected by insurance companies as it is.
Despite evidence of these bad practices, Michigan lawmakers want to allow big insurance companies one of the five seats on the PDAB, which would give them more power to perpetuate coverage denials for patients.
By imposing an “upper payment limit” (UPL) on certain medicines, reimbursements would not be able to bill above the mandated price. Insurers would then have the power to deny coverage based on the board’s rulings since the policy doesn’t require health plans to use the UPL to set the price a patient would have to pay. What’s more, there’s plenty of reason to believe that costs at the pharmacy counter wouldn’t even be lowered as a result.
With no accountability or transparency measures within the current legislation, there’s also no assurance that insurers won’t use the PDAB as a tool to deem a drug as too expensive to cover. Patients living with cancer, rare diseases, and chronic illnesses will be downstream of any bad actors sitting on this board and have fewer drugs and treatments to choose from, ultimately compromising their health.
The PDAB Bill Is a Lose, Lose For Patients
The specifics of this plan aren’t just alarming, but the politics behind them are, too. First off, the five seats on this board are appointed by the governor, not elected by the people, and have no interest group requirements other than that an individual from a pharmaceutical company cannot serve on the board.
Furthermore, the Michigan lawmakers have already voted on party lines to create the PDAB and, despite pushback to the bill, is rushing it through the legislative process without proper time to receive feedback from the most important stakeholders—the patients.
This Cannot Stand
Patients must always be the prime benefactors of any health policy introduced in this country, not the insurance companies that have failed us time and again.
At the end of the day, insurers and pharmacy benefit managers are the parties to be blamed for high drug prices. PDABs present an opportunity for these bad actors to have an even greater role in the drug pricing process. These boards empower insurers at the expense of patients.