Ask Governor to Veto HB1724

Dear Colleagues,
This is a letter from Dr. Harry Gewanter, Past President of the Medical Society of Virginia requesting that we consider signing and sending a statement to Governor Youngkin requesting that he veto the bill that has already passed the General Assembly related to creating a Prescription Drug Affordability Board to place an upper cap on the price of medications. The bill sounds good on the surface. In reality, however, due to the way it is structured, it will cost taxpayers millions of dollars and will not reduce the cost of drugs to the patients at all, and could make things even worse by reducing access to certain drugs. The governor plans to veto it as he did in 2024, but he needs our support for this. Please read the letter from Dr. Gewanter to the Governor as copied below:

"February 26, 2025

The Honorable Glenn Youngkin
Governor of the Commonwealth of Virginia
State Capitol, Third Floor
Richmond, VA 23219

Dear Governor Youngkin,

As physicians who have collectively spent decades caring for patients across the Commonwealth, we strongly urge you to veto HB1724, Delegate Delaney’s legislation to create a Virginia Prescription Drug Affordability Board (PDAB).

While the bill’s noble intention is to lower prescription drug costs, as written we do not believe it will achieve that goal. We also believe the bill creates a high likelihood of limiting access to critical medications for Virginians who depend on them. It is an idea that has not yet proven itself and recommend that Virginia pause and learn whether it will actually succeed before jeopardizing patients’ access to treatment.

PDABs and the Upper Payment Limits (UPLs) they may set are theoretical constructs that have not yet shown any ability to save a single patient money anywhere. Rather, current evidence demonstrates that it costs the states who have PDABs around $1 million a year. Given the current concerns regarding health care costs and funding, we believe there are many better uses of these funds.

No one in the drug production, supply and pricing system is innocent for our current state. Multiple entities contribute and are accountable. However, PDABs, as conceived by HB1724, have not made nor are proven to make prescription drugs more affordable for patients. It will likely take 3-4 years and cost the Commonwealth around $3-4 million dollars before a single UPL is created and no one knows how long after that to determine its success or failure. That is a very long and expensive experiment with the potential to cause many Virginians harm.

As clinicians who utilize and prescribe medications every day, we fully understand the urgency of alleviating the financial burden of prescription medications and health care overall. However, HB1724 downplays the complexities and fails to address the dynamics of pharmaceutical pricing. It does not consider the national and international nature of the drug production, supply and pricing system or the many intermediaries involved in this complex and interrelated system. By ignoring the role of the pricing and supply chain intermediaries, such as insurers, wholesalers and pharmacy benefit managers (PBMs), we do not believe the PDAB is structured in a way to actually save patients money and would likely result in decreased access to medications with UPLs.

HB1724, as is the case with all the model PDABs in effect or legislatively proposed, only addresses the manufacturers’ list prices and would impose an UPL on medications it determines “not affordable” or “may be not affordable”. A major flaw in this approach to price controls is that it does not acknowledge the reality that manufacturers do not determine what the patient pays for their medication. Insurers and PBMs decide what medications are available (formulary placement) and what the patient pays for each medication, not the manufacturer. HB1724’s anticipation of a “trickle down” economic model saving patients money is not one that works in the real world.

The implementation of PDABs in other states has already led to several predictable obstacles that impact patients and providers:

· Inability to Accurately Assess Drug Costs: PDABs have had great difficulty determining how to incorporate key factors to patients’ drug expenses, including formulary placement, the 340B drug program, patient copay cards, patient assistance programs and the impact of copay accumulator, copay maximizer and alternative funding programs. This results in an incomplete and misleading view of drug pricing and patient costs.

· Lack of Viable Replacement for QALYs: Despite legislation that bans the use of QALYs (Quality Adjusted Life Years) in the assessment of the value of an intervention, Colorado has stated that they have no other metric to use. As you know, QALYs are inherently discriminatory against older individuals and those with disabilities.

· Unintended Cost-Shifting Without Patient Savings: A 2024 study by Avalere of health care payers showed that UPLs will not result in lower costs for patients as they would just cost-shift whatever financial losses they might incur . Since most medications are purchased through regional or national group purchasing organizations, placing a price limit on Virginia purchasers will limit physicians’, pharmacies’ and infusion centers’ ability to obtain and administer these medications, thereby limiting access to the patients who need them.

· No Consideration for Provider Costs: PDABs do not account for the operational costs physicians incur when obtaining, storing or administering these medications. Without allowances for these necessary overhead expenses, providers will face financial strains that further reduce their ability to provide these treatments in the most patient- friendly and economic environments.

It is an unfortunate reality that the medications that have the highest list prices are ones required by Virginians with the most serious, disabling, rare and chronic illnesses. Not only is the creation, production and administration of these medications more expensive, but the number of patients who would benefit by these miraculous agents is low, further limiting the ability of the researchers and manufacturers to recoup their investments. While insurers and PBMs claim to save money for their clients, they have not released the data to prove this claim. Further, the vast majority of PBMs have conflicted relationships and no fiduciary responsibility to patients since their clients are corporations or, in many cases, themselves.

PDABs in other states are currently targeting conditions such as arthritis, lupus, diabetes, cancer, heart disease, eczema, asthma and COPD, cystic fibrosis, psoriasis, Crohn’s disease and others with some of the most innovative, life-changing treatments available today. Compared to having these conditions untreated or inadequately treated, these “expensive” medications actually reduce total costs over the long term. Rather than rushing into creating an unproven and unaccountable Board that could have multiple detrimental effects for both individual Virginians and the Commonwealth, we urge you to veto this ill-conceived bill and work with the General Assembly to develop comprehensive legislation that addresses the real-world drivers of pharmaceutical spending. This entails scrutiny of the entire supply chain, looking beyond the list prices that bear little reflection of what a patient actually pays and focus on patient total costs and outcomes.

Please veto HB1724 and urge the legislature to continue working on addressing actual patient costs and access. Focus on the fact that for a medication to be accessible, it must be available and affordable; just being affordable is insufficient. While everyone knows it is a critical problem and wants to do something, no policy is better than bad policy. We applaud the desire of lowering patient health care costs, but do not believe HB1724 can achieve that goal.

Thank you for your attention to and action on this critical issue.

Sincerely,
Harry L. Gewanter, MD, FAAP, MACR
President, Virginia Society of Rheumatology
Board Member, Coalition of State Rheumatology Organizations
Board Member, Let My Doctors Decide Action Network"

If you agree that the Governor should veto this bill, please fill out the following form and submit it as soon as possible.

Feel free to forward this email to other colleagues or healthcare organizations that may be interested.

Thank you for your consideration.

Gregory J. Warth, MD, FACP
President, Coastal Virginia Medical

Veto HR Bill 1724