Patients, Not Bureaucrats!

The Issue

Proposed legislation in Minnesota would establish a Prescription Drug Affordability Board (PDAB) to oversee the price of certain prescription drugs in the state.

The PDAB would be an unelected, and therefore unaccountable, body of politically appointed government bureaucrats that would impose price controls in the form of an upper payment limit — that would determine rates for doctors and pharmacists.

PDAB would constitute another layer of bureaucrats standing between doctors and their patients—and between patients and their health.

Click on the article title to read our column in the Fargo Forum: “Price controls could pound the final nail in the coffin for rural Minnesota healthcare”

Why It Matters

As proposed, the bill could fundamentally impact patient access to some medicines while putting excessive burdens on community healthcare providers.

While it might sound well-intentioned on its face, the creation of a PDAB to implement government price controls is concerning for several reasons:

Innovation is at the core of Minnesota’s history—and its future. The current legislation would stifle the markets and future innovation and could significantly jeopardize this important part of the state’s economy—and Minnesotans’ health.
Unintended consequences of this legislation could limit consumers’ access to future treatments and lifesaving cures.
Disparities in access to care and health outcomes for underserved, rural, and minority populations have long been a significant issue. Any policy that could further restrict the availability of care to these populations needs to take the issue of health equity into consideration.
Currently, the community care setting offers the lowest site of service for cancer treatment compared to the hospital outpatient setting. Unfortunately, access to community-based practices has declined over the past decade due in part to reimbursement policies and regulations that disadvantage independent physician practices in favor of large, complex healthcare systems.

Mandating an upper payment limit that healthcare providers could receive would be another in a long history of public policy moves that inhibit patient access to breakthrough therapies while imposing further complexity in the delivery of community care.

Already, Medicare and Medicaid reimburse less than the cost of providing services, with rural hospitals incurring $5.8 billion in Medicare underpayments and $1.2 billion in Medicaid underpayments in 2020. This is in addition to $4.6 billion in uncompensated care provided by rural hospitals. Because rural hospitals are more likely to serve a population that relies on Medicare and Medicaid, they are not able to offset low public program payment rates with revenues from other patients. In the commercial insurance market, rural hospitals are often forced to accept below-average rates or are left out of plan networks altogether.

As a consequence, rural hospital closures have become common in recent years: Between 2010 and 2021, 136 rural hospitals closed.

Impact on Minnesota Patients

If price controls are imposed on medicines, doctors might be put in the untenable position of deciding whether to prescribe their preferred, more effective treatment at a financial loss or to administer an outdated, less effective treatment that fits within the price-controlled market. The PDAB would almost certainly bring with it a shortage of treatment choices for patients and doctors in Minnesota.

Thus, an unintended consequence of the PDAB might be to create a new “healthcare tourism” industry frequented by Minnesotans flocking to Wisconsin, Iowa, the Dakotas, and elsewhere—adding travel expenses on top of the costs of obtaining the best medical care.

What You Can Do to Help

Ask your legislator to oppose price controls on prescription drugs. Vote “NO” on establishing a PDAB of unelected, politically appointed bureaucrats in Minnesota.