Prescription Drug Affordability Boards and the ADA: A Potential Conflict?

Could state efforts to lower prescription drug prices inadvertently violate a federal civil rights law? It’s a question being asked about Prescription Drug Affordability Boards (PDABs) as they gain traction across the United States. PDABs are state-level entities designed to address the soaring cost of prescription medications, a crisis impacting millions of Americans. As policymakers seek solutions to improve affordability, PDABs have emerged as a popular strategy, with a growing number of states enacting legislation to establish these boards. While the intent behind PDABs is laudable, their implementation requires careful consideration to ensure they do not inadvertently create barriers for people with disabilities. The potential conflict between well-intentioned affordability initiatives and the Americans with Disabilities Act (ADA) highlights the need for vigilance to protect the rights of people with disabilities in the pursuit of lower drug prices. Our analysis reveals that PDABs are disproportionately focusing on medications used to treat conditions likely classified as disabilities under the ADA, raising concerns about potential ADA violations.

A Disproportionate Focus on Drugs for Disabilities

A recent analysis conducted by Community Access National Network (CANN) reveals a concerning trend: PDABs are disproportionately targeting medications used to treat conditions highly likely or likely to be classified as disabilities under the ADA. This finding raises serious questions about the potential for PDABs to create disparate impact and limit access to essential medications for people with disabilities.

The table below summarizes the key data points from the CANN Data Analysis Report:

State	Total Drugs Eligible	HIGHLY LIKELY	LIKELY	Total Potentially Disabling	% Potentially Disabling	% HIGHLY LIKELY	% LIKELY
CO-E	343	306	28	334	97.4%	89.2%	8.2%
CO-S	4	2	2	4	100%	50.0%	50.0%
MD	8	3	5	8	100%	37.5%	62.5%
OR	39	24	15	39	100%	61.5%	38.5%
WA	188	94	68	162	86.2%	50.0%	36.2%

Note: Percentages are based on the total number of drugs on each state's "Eligible for Review" list (or "Selected for Review" in Maryland's case), which represents the medications the PDAB could choose for a full affordability review. The Colorado data is presented in two rows: “CO-E” represents the 343 drugs eligible for review, and “CO-S” represents the four drugs ultimately selected for review by the PDAB. It is important to note that a lack of data transparency from some states limited our ability to perform a complete analysis for all PDABs. To determine a drug's relevance to this analysis, we evaluated each condition a drug treats based on its likelihood of being classified as a disability under the ADA, using a four-tiered ranking system: HIGHLY LIKELY, LIKELY, UNLIKELY, and VERY UNLIKELY.

In Colorado, 97.4% of the drugs initially eligible for review by the PDAB treat conditions categorized as “HIGHLY LIKELY” or “LIKELY” disabilities under the ADA. In Maryland and Oregon, every drug eligible for review falls into these categories. Even in Washington, where the percentage is lower, 86.2% of the drugs on the "Eligible for Review" list treat potentially disabling conditions.

This data demonstrates a clear pattern: PDABs are predominantly focusing on medications used by people with disabilities. This trend is particularly concerning given the variability and uncertainty surrounding PDAB processes for setting upper payment limits (UPLs), as highlighted by a recent analysis in Health Affairs.

A closer look at the specific condition categories targeted by PDABs further underscores this concern. In Colorado, the most frequently targeted categories include cancer, genetic disorders, autoimmune disorders, and hematological disorders. Maryland's PDAB focuses on endocrine disorders, autoimmune disorders, and respiratory disorders. Oregon’s list includes autoimmune disorders, addictive disorders, cancer, and endocrine disorders. Washington’s PDAB targets a similarly broad range of conditions, including autoimmune disorders, cancer, neurological disorders, and endocrine disorders. These categories encompass numerous conditions with a high likelihood of being classified as disabilities under the ADA.

The potential for PDABs to negatively impact people with disabilities is not merely hypothetical. In Colorado, the PDAB has already conducted affordability reviews on Enbrel and Stelara, two drugs used to treat conditions highly likely to be considered disabilities under the ADA. The Board determined that both medications are unaffordable, potentially leading to the establishment of UPLs, which would set limits on how much payers can reimburse for these drugs. If UPLs are set on these medications, it could significantly limit access for people who rely on them to manage their conditions.

Navigating the Legal Landscape: The ADA and Health Care

The disproportionate targeting of medications used by people with disabilities raises serious concerns about the potential for PDABs to violate the Americans with Disabilities Act. This landmark civil rights law prohibits discrimination against people with disabilities in all areas of public life, including healthcare.

A key concept in ADA law is disparate impact. This occurs when a policy or practice, even if seemingly neutral on its face, has a disproportionately negative impact on people with disabilities. As legal scholar Sara Rosenbaum explains, "Disparate impact claims arise when a plaintiff can demonstrate that a facially neutral policy disproportionately burdens or harms people with disabilities." In the context of PDABs, disparate impact could occur if, for example, the setting of UPLs on medications for disabling conditions leads to greater utilization management or formulary restrictions, effectively limiting access for people with disabilities while having a less pronounced impact on people without disabilities. The potential for supply chain disruptions and the lack of guaranteed cost savings for patients, as highlighted in the recent Health Affairs article, further underscore the risk of disparate impact.

The ADA also requires covered entities, including healthcare providers and insurers, to provide reasonable accommodations to people with disabilities. Reasonable accommodations are adjustments to policies, practices, or procedures that enable people with disabilities to participate fully and equally in programs and services. However, the ADA does recognize that some accommodations may pose an "undue burden" on covered entities, meaning they would require significant difficulty or expense. The ADA National Network provides relevant examples in the healthcare context, such as modified meeting formats, accessible materials (e.g., large print, Braille), and the provision of sign language interpreters. PDABs must proactively incorporate reasonable accommodations into their processes to ensure meaningful participation for people with disabilities. This includes providing accessible meeting locations and materials, offering alternative formats for public comments, and ensuring that people with disabilities have equal opportunities to engage in the PDAB’s decision-making process.

Any limitations on access to medications resulting from PDAB actions must be justified by legitimate, non-discriminatory reasons. Historically, a common defense used to shield discriminatory coverage designs from legal challenges has been the "fundamental alteration" defense. This defense argues that modifying a benefit plan to accommodate the needs of people with disabilities would fundamentally alter the nature of the plan and is therefore not required under the ADA. However, the Affordable Care Act (ACA)'s emphasis on comprehensive coverage and non-discrimination weakens this defense. As the Supreme Court recognized in Alexander v. Choate, the benefit provided through a healthcare program is not merely the individual services offered, but also the opportunity for meaningful access to those services. The ACA's statutory language in Section 1557 reinforces this principle, prohibiting discrimination in benefit design and requiring coverage of essential health benefits. This shift in healthcare law strengthens the legal basis for challenging discriminatory PDAB practices that limit access to medications for people with disabilities.

The QALY Conundrum: Undervaluing Life with a Disability

Compounding the risk of discrimination in PDAB practices is the potential for these boards to rely on a flawed metric known as the Quality-Adjusted Life Year (QALY) when evaluating drug affordability. The QALY is a measure used to assess the value of medical interventions by considering both the quantity and quality of life gained. While seemingly objective, the QALY inherently devalues life with a disability.

The problem lies in how the QALY calculates "quality" of life. It relies on societal perceptions of health and functioning, often derived from surveys of the general public. As the Disability Rights Education & Defense Fund (DREDF) explains in a recent report, "The QALY equation relies on a baseline of 'perfect health' that is calculated by society’s conception of health and functioning." This means that people with disabilities are automatically assigned a lower quality-of-life score, regardless of their own lived experiences.

The DREDF report provides compelling examples of how the QALY can lead to discriminatory coverage decisions. For instance, the drug Trikafta, a breakthrough treatment for cystic fibrosis, has been shown to significantly extend the lives of people with this condition. However, because cystic fibrosis often involves functional limitations, the QALY undervalues the life extension benefit of Trikafta, potentially leading payers to deem it too expensive to cover. Similarly, medications for opioid use disorder, which can dramatically improve daily functioning and quality of life for people with this condition, are often undervalued by the QALY due to societal stigma and negative perceptions of opioid use disorder.

Some proponents of the QALY have proposed an alternative measure called the Equal Value of Life Years Gained (evLYG). The evLYG avoids discounting life extension based on quality of life. However, as the DREDF report points out, the evLYG fails to account for quality-of-life improvements, making it an incomplete solution.

The potential for PDABs to rely on QALY-based analyses is a serious concern. While some states explicitly prohibit the use of QALYs in setting UPLs, the lack of consistent language across all states and the continued focus on cost-related factors raise concerns about the perpetuation of bias in drug valuation. If PDABs utilize the QALY or similar metrics that fail to account for the true value of medications for people with disabilities, they risk exacerbating existing disparities and undermining the ADA’s guarantee of equal access to healthcare.

Can PDABs Overcome Inherent Bias in Drug Selection?

The establishment of PDABs, despite their purported goal of lowering drug costs, raises serious concerns about potential discrimination against people with disabilities. Our data analysis reveals a deeply troubling pattern: across all states examined, the vast majority of drugs targeted by PDABs are those used to treat conditions highly likely or likely to be classified as disabilities under the ADA. This striking trend, with some states demonstrating an exclusive focus on medications for potentially disabling conditions, calls into question the fundamental fairness and equity of PDAB drug selection processes.

This overwhelming focus on medications for potentially disabling conditions raises a fundamental question: can PDABs, as currently designed, ever truly operate in a manner that is equitable and non-discriminatory? The very nature of these boards, tasked with identifying "unaffordable" drugs and setting limits on their reimbursement, appears inherently biased against medications vital to the health and well-being of people with disabilities. Furthermore, the potential for PDABs to negatively impact the 340B Drug Pricing Program adds another layer of concern. As previous CANN articles have highlighted, UPLs set by PDABs could significantly reduce the revenue generated by 340B discounts, undermining a major source of funding for safety-net providers and jeopardizing access to care for vulnerable communities.

Proposals for mandatory ADA compliance reviews, data transparency, and stakeholder engagement, while necessary, are unlikely to fully address this fundamental flaw. Compliance reviews are reactive and cannot prevent all discriminatory outcomes. Data transparency, while necessary for accountability, does not guarantee equitable decision-making. And even meaningful engagement with disability rights organizations and people with disabilities cannot fully compensate for the inherent biases that may be embedded in PDAB processes.

Given the clear evidence of implicit bias in PDAB drug selection, more investment needs to be made in studying the potential discriminatory nature of these boards.

• Quantify the Disparate Impact: Conduct comprehensive analyses to determine the extent to which PDAB drug selection and UPL-setting processes disproportionately impact people with disabilities.

• Evaluate Alternative Strategies: Explore and compare the potential impact of various drug affordability strategies, including PDABs and alternatives such as direct price negotiations, expanded patient assistance programs, and bulk purchasing agreements, on access to medications for people with disabilities.

• Develop Robust Safeguards: If states choose to move forward with PDABs, they must develop and implement comprehensive safeguards to mitigate the risk of discrimination. These safeguards should include mandatory ADA compliance reviews, comprehensive data transparency requirements, and meaningful engagement with disability rights organizations and people with disabilities throughout all stages of the PDAB process.

Addressing the complex intersection of drug affordability and disability rights requires a nuanced and evidence-based approach. Until we have a deeper understanding of the potential for discrimination and the efficacy of safeguards, the viability of PDABs remains in question.