A bill seeking to regulate the maximum price of certain prescription drugs narrowly passed the House Thursday on a vote of 62-39 and now heads to the Senate.
Senate Bill 3496, sponsored by Rep. Nabeela Syed, D-Palatine, would establish an independent board with the power to set the maximum price that a drug can be sold for in the state, also referred to as an upper payment limit.
The board, made up of governor, Senate and House leadership appointees, would do so by reviewing vital information including a drug’s average price, its manufacturing cost, average copayments, accessibility and use, and other information.
The bill’s passage marked a significant turnaround from when Syed pulled a previous version of it from the record before a floor vote in mid-April. Syed has led a yearslong effort to pass the initiative.
“I introduced this legislation when I first got elected, and I did it out of desperation. There are so many people in my community that are specifically struggling with prescription drug affordability,” Syed, who was elected in 2023, said. “We have a mandate to care, and we have a mandate to try to do every single thing in our power to deliver for our constituents.”
But it doesn’t mean smooth sailing is ahead. The measure still needs Senate approval, and Gov. JB Pritzker hasn’t yet signaled whether he’d support it. The measure faced criticism and skepticism during floor debate, including from Republicans who questioned whether it can be effectively implemented and if it would actually have the effect of lowering drug prices.
During floor debate, Republicans pointed to Virginia, where Gov. Abigail Spanberger recently vetoed a similar bill.
“The Virginia governor just vetoed their prescription board due to the inefficiencies and cost and effectiveness of this,” Rep. Jackie Hass, R-Kankakee, said. “As much as we would like to see prescription drugs become more effective, there is a lot more that needs to happen with this bill.”
Amendments
Syed said she’s already developed several substantive amendments in the past two months to address concerns.
“I've worked hard to negotiate this language. I've engaged with every single stakeholder that I can think of,” Syed said. “I've kept my door open. I've taken commentary from folks on the other side of the aisle in committee and brought amendments back to reflect those changes.”
The most significant change is that the program would be slated to end in five years, giving lawmakers the opportunity to renew if it’s effective.
Amendments would also limit the board’s review to a maximum of two drugs per year, outside of automatically adopting drug prices negotiated at the federal level. The state would also have the choice to opt into the upper payment limit for state employee health plans or decline to, if other federal drug rebates would be more cost effective.
The 2022 Inflation Reduction Act gave the Centers for Medicare & Medicaid Services negotiation power over pricing of certain prescription drugs, including the Maximum Fair Price, or MFP, mechanism for Medicare users.
But advocates say the federal program was never meant to be used by the states for people who are not enrolled in Medicare.
“The MFP was never intended to be applied at the state level,” said Peter Fotos, a representative of PhRMA, a policy advocacy group representing pharmaceutical companies, in committee on May 20.
“MFP is restricted to Medicare for a reason, because Medicare is a different animal. … It is not the same in any form, fashion, operation or otherwise to a state health plan, or a commercial market plan, or even Medicaid,” Fotos said.
If established, the board would automatically adopt the first 10 negotiated Medicare drug prices and apply them to the drugs for any person statewide. The board would also automatically adopt MFPs for other drugs negotiated by the federal government in the future.
“There could be additional drugs looked at sooner, but first we have to prioritize the implementations of those 10 drugs,” said Anusha Thotakura, executive director of Citizen Action/Illinois, a progressive policy coalition backing the initiative. “That was made based on extensive negotiation and stakeholder feedback that was considered about wanting to see what implementation process looks like before considering other drugs.”
To protect patient access and savings, Syed added provisions requiring the board to develop an accessibility plan for UPL-approved drugs, specifying how savings and UPLs should be applied to provide direct financial benefit and allowing the board to suspend the UPL if there is a shortage, unless it is caused by a manufacturer.
The amendments also clarify public records requirements and state agency roles to protect proprietary information.
Lawmaker, advocate concerns
Haas voiced concerns that the board would be effectively governing itself in its rulemaking and appeals procedures.
The board would be subject to the same rulemaking processes as other state agencies, which must be approved by the legislative Joint Committee on Administrative Rulemaking, or JCAR. Appeals to board decisions would be heard directly by the board but would be subject to judicial review.
“We’re (JCAR) going to inherit this mess that you create with this legislation,” JCAR member and Rep. Ryan Spain, R-Peoria, said in committee. “The operationalization of this, again, is a mess, the way that it is delivered. So why don't we have an agency assigned to work with this board?”
Syed said she didn’t see a need to house the board in a state agency because it would be working with multiple agencies, and most other states with a PDAB made it independent of an agency.
Eleven states currently have a board, although no other state has fully implemented a upper price limit, which lawmakers identified as a concern.
In committee, lawmakers also questioned the startup costs of the board and if was being considered in the budget. The board is expected to employ an executive director, general counsel, part-time staff and contractors for surveys, but the bill does not include provisions regulating those salaries, other than capping spending annually at $750,000.
Syed said it was not being considered as an active budget item, meaning it would need to apply for funding from general revenue if passed. But once a UPL is in effect, the bill directs state savings to be collected in a fund that would be used for board costs.
Lawmakers and stakeholders also criticized Syed’s characterization of the five-year sunset and limited drug reviews as making the board into a “pilot program.”
“A sunset clause does not erase the fact that the bill creates a new independent state board, staff, funding and legal authority,” Fotos said. PhRMA has said PDABs don’t solve high prices, pointing to health plans and pharmacy benefit managers as the root of the problem.
The bill faces a long road ahead in the Senate before lawmakers adjourn on May 31.
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
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