States Have Formed PDABs to Manage Patient Drug Costs

Prescription Drug Affordability Review Boards (PDABs) are independent, state-level boards that review prescription drug costs. Some states have implemented PDABs with the authority to implement Upper Price Limits (UPLs) as a price control for prescription drugs deemed to pose an “affordability challenge” to consumers. UPLs attempt to limit the cost of certain drugs for states and other payers.

As of December 2025, CO, MA, ME, MN, NJ, NH, OR, and WA have created PDABs or similar bodies that are required to conduct drug affordability reviews. Other states have created bodies to study drug costs but have different mandates; for example, VT’s Green Mountain Care Board has the option to conduct an affordability review of a set of drugs, but it is not a requirement.

Currently, four state PDABs (CO, MD, MN, WA) have authority to set UPLs. State PDABs use different methodologies to set UPLs, with some states tying the UPLs to a reference price (e.g., Minnesota’s UPL is tied to the drug’s Maximum Fair Price [MFP]). The applicability of UPLs to specific payer markets varies across states. Typically, PDABs will apply to Medicaid and state-regulated commercial markets.

In October 2025, CO became the first state to establish a UPL: $600 per unit of Enbrel, which is aligned with the negotiated MFP price. The CO PDAB’s ability to set UPLs has faced legal challenges, and court cases regarding the Board’s authority are ongoing.

Avalere Health conducted an analysis to understand the impact of PDABs; the analysis included state-regulated, individual and small group, Medicaid FFS, and Managed Medicaid covered lives. As of December 2025, approximately 7.8 million individuals (2.28% of total covered lives in the US) are impacted by PDABs with UPLs (i.e., enrolled in state regulated commercial or Medicaid coverage in a state with UPL authority). Within PDAB states, 30–55% of covered lives are enrolled in UPL-eligible markets (Table 1).

Table 1: Percent of Individuals Subject to UPLs by State

*Analysis includes non-Employee Retirement Insurance Security Act individual and small group plans, Medicaid FFS, and Managed Medicaid plans. States may vary in what groups may fall under PDAB implementation. Data sourced from AIS Enrollment Data, September 2025

Stakeholder Implications for Evolving State-Level Drug Pricing Legislation

States’ actions to address the rising cost of prescription drugs are likely to expand and continue. State legislatures have continued to consider the establishment of PDABs with UPL authority, and have increasingly linked UPL-setting methodologies to domestic and international references prices (e.g., MFPs). States have also begun to consider legislation to establish MFP-based price controls within state-regulated markets for all negotiation-selected drugs, bypassing the PDAB process altogether.

These growing price control efforts have the potential to impact the healthcare ecosystem in both PDAB and non-PDAB states. PDAB reports are publicly available and may be referenced by providers, payers, and patients when making treatment and coverage decisions. UPLs established by PDABs set price ceilings for state-regulated markets and will impact pharmacy and provider reimbursement, payer coverage decisions, and overall patient access. The future evolution of these programs remains uncertain as legal challenges against state price control efforts continue.

Looking Ahead

Close monitoring of state PDAB activity will be critical in understanding overall patient access and manufacturer financial implications.

Stakeholders should consider the broader implications of PDABs establishing UPLs, including potential disruptions across the drug supply chain, shifts in manufacturer and payer rebate structures, and impacts on patient access. These effects may be amplified in states that begin incorporating Medicare-negotiated MFPs or referencing international or Most-Favored Nation pricing benchmarks.

Avalere Health helps clients understand the evolving landscape of state price controls, model the impacts of these policy changes, and identify solutions accounting for financial exposure while maximizing appropriate patient access. With its hands-on policy experience from the payer, manufacturer, and third-party vendor perspectives, Avalere is well positioned to help your organization respond to—or shape—the evolving copay adjustment program and drug pricing landscape.

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