This research paper examines state use of existing pricing benchmarks, including Medicare’s “Maximum Fair Price” (MFP), international reference prices and other state UPLs. It finds that these approaches may not address underlying affordability challenges and could lead to unintended consequences for patient access, coverage and healthcare system dynamics.

This research paper offers an analysis of recent state activity and builds upon our initial findings that UPLs are likely to result in unintended consequences and implementation challenges throughout the healthcare ecosystem, ultimately resulting in reduced access and increased costs for patients.

In this first-of-its-kind analysis, we concluded that UPLs will not help states achieve their intended goals of reduced patient out-of-pocket costs and lower state drug spend. Rather, they could create unintended negative consequences, such as reduced access, larger patient out-of-pocket burden and reduced reimbursement for providers.

Some state legislatures have established PDABs as a mechanism to conduct drug affordability reviews on specific products.

• Maryland created the first state PDAB in 2019.¹
• Since then, Colorado, Louisiana, Maine, Minnesota, New Jersey, New Hampshire, Oregon and Washington have created PDABs or similar entities to conduct drug affordability reviews.^1,2 However, as of July 1, 2025, the New Hampshire PDAB has been dissolved.³
• Other states have created bodies to study drug costs but have different mandates; for example, Vermont’s Green Mountain Care Board has the option to conduct an affordability review of a set of drugs, but it is not required.⁴

UPL setting for select drugs may shape payer and PBM decision-making in ways that could work counter to PDABs’ primary intent and increase patient cost sharing or reduce patient access.

Payers have confirmed they are considering these actions
if UPLs are implemented.¹³ In research conducted in 2024 from Avalere Health and the Partnership to Fight Chronic Disease, when asked about the potential for these benefit design changes, all interviewees agreed that UPL-affected drugs or their competitors in the therapeutic class could see greater UM, depending on how manufacturers respond to supply chain changes, rebating and UPL implementation. In addition, five of six interviewees indicated that they expect formulary adjustments, such as moving selected drugs and therapeutic alternatives to different tiers.¹⁴ In a 2025 survey update, 57% of the health plan respondents said they anticipate increasing premiums due to UPL implementation.¹³

Much of PDABs’ efficacy hinges on the ability to produce valuable solutions that work across the drug pricing supply chain and the unproven assumption that cost savings will be passed onto patients. Future negative effects of price setting may include:

• Alteration of payer and PBM benefit designs across states and markets due to lowered reimbursement for products.
• Changes in both payer and PBM contracting, as well as manufacturer contracting for products, altering provider reimbursement and Medicaid rebates.
• Reductions in manufacturer innovation and research in high-value areas subject to price limits, similar to the effects of the Inflation Reduction Act (IRA).