PDABs Cost Money, Where are the Savings?

Prescription Drug Affordability Boards (PDABs) claim to save patients money, but state records show a years-long trail of millions spent with no savings produced.

The first PDAB was created in 2019 under the guise of lowering health care costs for people in Maryland, with a handful of states following suit since then. Now, even more states are considering authorizing these boards.

Existing Boards Have Not Delivered Savings

In a recent legislative hearing, a representative of Maryland’s PDAB stated that their current work is doing the proof of concept. That is, now in its sixth year of operation, the PDAB has yet to demonstrate the concept works, let alone save a single dollar for patients.

In fact, despite years of operations and millions spent, no PDAB in any state has saved a single dollar for patients or the government. Based on statements from payers and state reports, it’s unclear they ever will.

Boards Have Come at a Cost

While not achieving any savings, Prescription Drug Affordability Boards do realize costs.

A fiscal note attached to the legislation creating the Maryland PDAB projected a cost over $4 million from establishment through Fiscal Year 2024.  The current budget before the legislature would allocate another $1.28 million for Fiscal Year 2026 operations.

In Colorado, the PDAB was projected to cost over $800,000 in its first year and $515,000 each year thereafter. However, in Fiscal Year 2023-2024 there was a request for a supplemental amount of $260,000.

Minnesota’s PDAB was authorized in 2023 and allocated over $1 million for its first two years, with a baseline of $500,000 for Fiscal Year 2026. It has yet to identify an executive director.

And in Oregon, the fiscal impact statement accompanying the legislation authorizing the PDAB anticipated costs of almost $4.2 million for its first four years of operation.

Currently under consideration by the legislature in Virginia, the Commonwealth’s PDAB is expected to cost between $895,000 and $1.145 million each year according to its fiscal impact statement.

Actual spending by boards may differ from these expected costs, but for legislatures authorizing PDABs the question might be: Do these new costs bring any value to patient care?