Study Reveals Affordability Issues for Two Diabetes Medications in Maryland

Maryland’s Prescription Drug Affordability Board Identifies Cost Issues with Two Diabetes Medications

Maryland’s Prescription Drug Affordability Board (PDAB) has identified two diabetes medications—Jardiance and Farxiga—as having affordability challenges for residents. These findings come from a cost study conducted by the state agency, which focuses on reducing medicine costs for the population.

During a recent meeting, the board revealed that a significant portion of the cost of these drugs is borne by patients, even with insurance coverage. The study found that patients often pay out-of-pocket amounts ranging from $400 to over $1,000 annually for these medications, depending on the specific drug code used.

Jardiance and Farxiga are not only used to treat diabetes but also address heart failure and chronic kidney disease. This dual use makes them essential for many patients, yet their high prices raise concerns about access and affordability.

Joseph Levy, a board member and assistant scientist at the Johns Hopkins School of Public Health, highlighted the financial burden these drugs place on patients. He noted that the cost of these medications has increased rapidly, outpacing overall inflation and placing additional strain on the healthcare system.

Pharmaceutical companies AstraZeneca and Bristol-Meyers Squibb manufacture Farxiga, while Jardiance is produced by Boehringer Ingelheim and Eli Lilly and Company. However, none of these companies have responded to requests for comment on the matter.

Kelly Schulz, CEO of the Maryland Tech Council, expressed concerns that imposing price caps could negatively impact the life sciences industry in Maryland. She warned that arbitrary price controls might discourage investment in research and clinical trials, which are crucial for developing new treatments and creating jobs.

“Maryland should be encouraging investment, not potentially limiting it,” Schulz said in an emailed statement. “We continue to encourage the Board to create greater opportunity for stakeholder engagement and to explore non-Upper Payment Limit alternatives to lower patients’ out of pocket costs.”

During the meeting, the board met privately to discuss proprietary information related to the pricing of each drug over time. Both Jardiance and Farxiga were subject to individual studies, which yielded similar results. The study found that 1% of Maryland’s total gross spending on drugs went to Farxiga, while 2.5% went to Jardiance.

Gerard Anderson, a board member and professor at Johns Hopkins University, emphasized that these percentages represent a significant portion of the state's drug spending. He pointed out that the wholesale acquisition cost (WAC) of Farxiga has increased substantially faster than overall inflation, contributing to higher costs for the healthcare system.

The board also considered therapeutic alternatives when evaluating the costs of these medications. Joseph Levy stressed the importance of ensuring that effective drugs like Farxiga remain accessible to patients. He argued that the effectiveness of these drugs should be taken into account when assessing affordability and access.

Vincent DeMarco of Maryland Healthcare for All expressed hope that the PDAB would implement a cap on the cost of these drugs based on the findings of the study. He encouraged the board to use its legislative authority to make high-cost drugs more affordable for all residents.

An argument against upper payment limits (UPLs), which aim to restrict how much the state and consumers pay for prescription drugs, is that they could reduce the availability of certain medications. Pharmaceutical companies may choose to limit inventory in states where profits are lower, potentially affecting patient access.

According to the board’s cost study, AstraZeneca and Bristol-Myers Squibb received over $30 million in gross spending from Maryland between 2022 and 2023. If a UPL is implemented, these companies could see a reduction in revenue from the state.

A 2024 study by Public Citizen, a consumer watchdog group, found that 10 pharmaceutical companies spent $107 billion on stock buybacks, dividends, and executive compensation compared to $97 billion on research and development. Peter Maybarduk, program director at Public Citizen, criticized the industry’s claims that Medicare price negotiations hinder innovation.

“The industry tells us that Medicare price negotiations will make it hard to research and develop new drugs,” Maybarduk said. “What they leave out is that many are already spending far more to make their executives and shareholders rich than on R&D. When these corporations complain about the impact of price negotiations on innovation, we should be deeply skeptical.”

The PDAB has committed to making the cost studies available to the public through its website. The board will hold another meeting on September 15 to review the findings and receive public input before deciding on its next steps.