New Minnesota prescription drug board gets up and running but expects industry resistance

Russ Schmidt
A new panel established by the state Legislature will soon begin its work to try to make prescription drugs more affordable for Minnesotans.
Rick Bowmer | AP Photo 2016

Debate in Washington over prescription drug pricing has gone on for a long time. But state leaders, including those in Minnesota, have grown impatient with the pace of activity in Congress, so they’re trying to tackle cost matters themselves.

That’s one of the drivers behind a new Prescription Drug Affordability Board, which was established in law last year and will soon begin its work.

“The board is going to look for the drugs that have the biggest impact on Minnesotans,” said DFL state Rep. Zack Stephenson, the lead author of the legislation that created the board.

“We really want to find the drugs that are causing the most stress to Minnesotans and start there,” Stephenson said.

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There are similar efforts in other states — with Colorado the furthest along — to try to bring down prescription drug prices. The boards are often referred to as “PDABs.” 

Stephenson said Minnesota’s board is unique because it is authorized to determine if drug manufactures are overcharging and reduce prices accordingly for any prescription drug.

“We’ve passed the strongest prescription drug affordability board in the country,” Stephenson explained. “There are no carveouts, no exceptions. It has all the tools that are needed to try and really make a difference in bringing down the cost of prescription drugs.”

Health exchange
Sen. Tony Lourey, DFL-Kerrick, answers questions about the health insurance exchange bill before it passed on a 39-28 vote on Mar. 18, 2013 at the State Capitol in St. Paul.
Jennifer Simonson | MPR News 2013

Tony Lourey is one seven voting board members. He was known for his health care expertise while serving in the Minnesota Legislature and later in the executive branch. He said the board has a lot of work ahead of it, and he’s expecting help from the state departments of Health and Commerce. 

Lourey said he’s hopeful pharmaceutical manufacturers will cooperate.

“We’re not trying to deny a profit margin for any entity within the health care system,” Lourey said. “But we have to make sure that it’s not exorbitant.”

The legislation that created the board also authorized the state to cap prices for generic drugs. That piece is already the subject of litigation from an industry trade group called the Association for Accessible Medicines. Last month, a federal judge put enforcement of that measure on hold as the lawsuit proceeds; the state is appealing.

There is expectation that industry groups will challenge the new board’s authority in court, too.

“We were very interested obviously in this conversation,” said Reid Porter a senior director at PhRMA which represents drug makers. The group spent nearly $1 million during last year’s legislation lobbying against the board, according to records on file with the state Campaign Finance and Public Disclosure Board.

“The truth is that PDABs bluntly risk patients’ access to medicine,” Porter said. “They reduce predictability for patients, they tend to ignore the true reasons for high patient out of pocket costs and they jeopardize development of new medicines.”

Supporters of the effort to reduce the cost of prescription drugs say the pharmaceutical industry is much more concerned about preserving profit margins than patient access to medicine.

The Minnesota Council of Health Plans, which represents Minnesota’s nonprofit health insurers, thinks the new drug affordability board is a worthy effort.

“We’re concerned with any, any part of the health care system that adds costs to the system,” said Dan Endreson, the director of government affairs at the council.

“Drugs have become a bigger part of the pie when it comes to healthcare spending,” Endreson said. “It’s gotten now almost larger than in hospital care.”

TakeAction Minnesota, an advocacy organization aligned with many Democratic causes, pushed hard for the board. It spent more than $137,000 last session on lobbying, but on an array of issues beyond just pharmaceutical pricing.

The group’s spokesperson, Kenza Hadj-Moussa, is encouraging board members to move ahead with their work rather than be intimidated by legal challenges.

“It will be really important for Minnesota’s Prescription Drug Affordability Board to stay the course and to just stay focused on the work,” Hadj-Moussa said. “We believe it is completely in legal bounds.”