Background 

The first prescription drug affordability board (PDAB) was enacted in Maryland in 2019, modeled on a National Academy of State Health Policy (NASHP) framework. The process was originally intended to be board-driven: a PDAB would review drugs’ affordability and, where authorized in statue, set an upper payment limit (UPL) through methodology of its choosing.  

As PDABs have moved from concept to reality, states appear to be aligning around setting UPLs based on the Medicare Drug Price Negotiation Program’s (MDPNP) maximum fair prices (MFPs). In October 2025, the Colorado PDAB capped the price of Enbrel at $600 per dose, slightly higher than the MFP for that product. In 2026, Maryland has set two UPLs—for Jardiance and Ozempic—both tied to MFPs.  

Other states with UPL authority (Minnesota, Washington) are earlier in the process. To date, no UPL has taken effect anywhere in the country, and no effectuation guidance has been published. Oregon has continued to conduct affordability reviews without UPL authority; having reviewed more than 30 drugs across its 2025 and ongoing 2026 cycles, relaying recommendations to the Legislature rather than imposing price caps.   

Meanwhile, New Hampshire, Vermont, and Ohio have moved in a different direction. New Hampshire and Ohio dissolved their PDABs via budget legislation in 2025. Vermont’s Green Mountain Care Board, directed by statute to evaluate a PDAB model, recommended against one in its January 2026 final report, citing limited market leverage, constitutional constraints, and administrative costs.  

In 2026, the expansion of UPL-authority models have been further delayed: Illinois’ UPL bill did not leave committee before the legislative session ended, and Virgina’s MFP-anchored bill was vetoed for the third consecutive session. Unlike most UPL approaches, which impose a price celling on what payers may reimburse, Virgina’s bill created a two-sided cap limiting what state-regulated plans could pay for a drug and prohibiting manufacturers from accepting payment above MFP. It was the most aggressive state drug pricing mechanism attempted to date under a PDAB model.  

In the meantime, transparency-only bills moved forward, with Louisiana adopting the most limited approach without UPL authority, focusing on transparency and data collection rather than price regulation.  

The landscape is shifting 

The Inflation Reduction Act’s MDPNP gives states a federally negotiated number to leverage. NASHP’s new model legislation favors anchoring state payment limits directly to MFP. Given the complexity of UPL implementation and the significant costs associated with operating a PDAB could the new model legislation reshape how states approach price controls?  

Anchoring to MFP may appear less administratively burdensome for states. Rather than building and defending an independent methodology, a state can adopt an already-negotiated federal benchmark. However, a price built for Medicare does not necessarily fit a commercial market. Disease burden, utilization patterns, and cost structures differ significantly across markets. 

A recent federal court ruling in Colorado may have exposed vulnerabilities with this approach. On July 1, a judge granted a preliminary injunction against Colorado’s Enbrel UPL based on federal patent law preemption. As the case progresses, stakeholders are uncertainty about whether any state-established UPL could overcome federal preemption, regardless of methodology. Other states will be watching to see how this case resolves. 

Furthermore, the growing price control efforts may have downstream impacts on the healthcare ecosystem more broadly. PDAB reports are publicly available, allowing them to be referenced by providers, payers, and patients when making treatment and coverage decisions. PDAB-set UPLs on state-regulated markets can impact both provider and pharmacy reimbursement, payer coverage decision and cost-sharing, and patient access to medications. A survey of health plans echoes the same concerns and further highlights that costs associated with UPL implementation could put pressure on premiums and contractual arrangements with pharmacies and providers.  

What’s next 

Stakeholders will be wrestling with several considerations as the PDAB and UPL landscape awaits the final Colorado ruling:   

• The breadth of legal preemption: The Colorado preliminary injunction focused on the UPL as a price ceiling for a patented drug. It remains to be seen if states may consider other approaches, such as UPLs for products after patent exclusivity has expired. After all, Maryland deferred setting a UPL on Farxiga due to patent exclusivity expiration and subsequent generic entry. Although not addressed in the preliminary injunction ruling, other legal theories such as dormant Commerce Clause remain in litigation.  

• Is a payment limit different than a price cap? Federal courts have previously ruled against state attempts to cap prescription drug prices. While the NASHP model advanced in Maryland, Colorado, and elsewhere draws a distinction between “payment limits” and price caps, there is now one federal court that has rejected that logic. If states can neither cap prices nor payments, what approaches remain? 

• Is MFP-anchoring a safer path? The pitch for MFP anchoring was straightforward: tie the UPL to a number the federal government already negotiated, and the PDAB can avoid the costs and delays of setting their own. The Colorado ruling puts that assumption in question, since Enbrel’s UPL was based on MFP and has now been delayed indefinitely as the case proceeds to a hearing on its merits. Nine months have elapsed since the Colorado PDAB set Enbrel’s UPL, and it appears unlikely the UPL will go into effect in January 2027, as intended. Even if the court were to reverse course in a matter of weeks, the state still must deal with effectuation, which remains uncharted territory. 

• Will savings reach patients? UPLs cap what payers pay for specified drugs, but to date, states have not required coverage of drugs subject to UPLs or otherwise specified coverage terms. It remains to be seen whether UPLs can deliver savings on prescription drugs to patients at the pharmacy counter; thus far, they have not. 

• Do transparency-only boards meet the goals of policymakers? With the fate of UPLs in question, states may return to transparency-focused approaches such as those in Oregon and Louisiana. Like the UPL process, these efforts can be costly to states, and reviews of their effectiveness have been mixed.  

As state price control landscape continues to evolve, Avalere Health can help organizations anticipate changes, mitigate risk, and support with scenario planning. To learn more about how Avalere Health can assist you connect with us. For regular updates on state developments, subscribe to State Policy 360.