New RAAP Study Reveals Shortcomings of Upper Payment Limits on Drug Costs
The Rare Access Action Project (RAAP) recently released a critical study titled "Follow the UPL," which investigates the implications of upper payment limits (UPLs) imposed by state Prescription Drug Affordability Boards (PDABs) on pharmaceutical pricing. Though designed to curb escalating drug costs, the study reveals that UPLs are not achieving the intended financial relief for patients at the pharmacy counter. Instead, they may unintentionally jeopardize access to medicines for individuals with rare diseases.
The analysis, authored by Jennifer Snow of Apteka Policy, comprehensively evaluates the pharmaceutical supply chain, illuminating how UPLs primarily affect reimbursement structures rather than directly impacting the costs patients face during transactions at their local pharmacies. As of mid-2026, the findings highlight that no patient has reported lower drug costs as a result of state-set UPLs. The study explores numerous scenarios within the supply chain that demonstrate why these reimbursement caps do not translate to patient savings. In essence, UPLs serve as a ceiling for what payers will reimburse, rather than lowering medication prices outright.
One major concern raised in the report is that when drug reimbursement becomes economically unfeasible for pharmacies or providers, they may ultimately stop carrying certain medications altogether. This is particularly troubling for patients with rare ailments who often have limited treatment options. For individuals suffering from less common conditions, the withdrawal of a therapy from the market could mean a complete lack of available alternatives.
"States are right to focus on affordability, but policy solutions must work within the realities of how the supply chain actually operates," asserted Michael Eging, RAAP’s Executive Director. His statements emphasize that while the intention behind UPLs is commendable, their execution could endanger the availability of critical medications.
The study also points out the potential ramifications of a UPL intersecting with federal Medicaid costs. In instances where a state UPL is set lower than a drug's best price under Medicaid, it triggers a ripple effect: increasing the cost burden for manufacturers across the nation. This regulatory conflict may lead to systemic complications rather than streamlined solutions.
Moreover, patients diagnosed with rare diseases find themselves uniquely affected. While individuals with more common conditions might seek alternative treatments in a disrupted supply chain, those with rare diseases could face an outright absence of suitable therapies. If a drug's availability diminishes because wholesalers or manufacturers withdraw from a market, these patients fall victim to a system that had promised them protection but instead leads them to dire consequences.
Additionally, the study reveals the intricacies of the so-called ‘single-indication trap’. Exemptions intended to shield certain rare disease treatments vanish as soon as a manufacturer acquires FDA approval for another indication. The result? A financial disincentive discouraging the expansion of medication access for populations that truly need it.
Snow's report states, "When you follow the dollar through every layer of the supply chain, it becomes evident that a UPL is a reimbursement ceiling, not a patient savings guarantee." The dynamics between wholesalers, pharmacies, and health plans often result in cost savings failing to reach the patients who need them most.
In light of these findings, RAAP advocates for refining state policies that could more effectively lower drug costs without risking the stability of the pharmaceutical supply chain. Recommended strategies include cohort strategies to spread the financial load of high-cost therapies, capped copay initiatives, and policies to curb practices that undermine patient assistance programs. Each suggestion is aimed at aligning economic incentives with the overarching goal of improving patient access to medications.
Eging concluded, “The success of our policies should ultimately be gauged by whether patients can consistently access the treatments they need. Presently, the financial benefits are not reaching the patient.” The emphasis is clear: there are viable alternatives to UPLs that promise more effective cost-reduction mechanisms while safeguarding patients' access to essential care.
The Rare Access Action Project continues its efforts in raising awareness and pushing for actionable change, ensuring the voices of patients, particularly those with rare diseases, are heard and prioritized in policy discussions. The full study can be accessed through their website for those looking for a deeper dive into this pressing issue.
The analysis, authored by Jennifer Snow of Apteka Policy, comprehensively evaluates the pharmaceutical supply chain, illuminating how UPLs primarily affect reimbursement structures rather than directly impacting the costs patients face during transactions at their local pharmacies. As of mid-2026, the findings highlight that no patient has reported lower drug costs as a result of state-set UPLs. The study explores numerous scenarios within the supply chain that demonstrate why these reimbursement caps do not translate to patient savings. In essence, UPLs serve as a ceiling for what payers will reimburse, rather than lowering medication prices outright.
One major concern raised in the report is that when drug reimbursement becomes economically unfeasible for pharmacies or providers, they may ultimately stop carrying certain medications altogether. This is particularly troubling for patients with rare ailments who often have limited treatment options. For individuals suffering from less common conditions, the withdrawal of a therapy from the market could mean a complete lack of available alternatives.
"States are right to focus on affordability, but policy solutions must work within the realities of how the supply chain actually operates," asserted Michael Eging, RAAP’s Executive Director. His statements emphasize that while the intention behind UPLs is commendable, their execution could endanger the availability of critical medications.
The study also points out the potential ramifications of a UPL intersecting with federal Medicaid costs. In instances where a state UPL is set lower than a drug's best price under Medicaid, it triggers a ripple effect: increasing the cost burden for manufacturers across the nation. This regulatory conflict may lead to systemic complications rather than streamlined solutions.
Moreover, patients diagnosed with rare diseases find themselves uniquely affected. While individuals with more common conditions might seek alternative treatments in a disrupted supply chain, those with rare diseases could face an outright absence of suitable therapies. If a drug's availability diminishes because wholesalers or manufacturers withdraw from a market, these patients fall victim to a system that had promised them protection but instead leads them to dire consequences.
Additionally, the study reveals the intricacies of the so-called ‘single-indication trap’. Exemptions intended to shield certain rare disease treatments vanish as soon as a manufacturer acquires FDA approval for another indication. The result? A financial disincentive discouraging the expansion of medication access for populations that truly need it.
Snow's report states, "When you follow the dollar through every layer of the supply chain, it becomes evident that a UPL is a reimbursement ceiling, not a patient savings guarantee." The dynamics between wholesalers, pharmacies, and health plans often result in cost savings failing to reach the patients who need them most.
In light of these findings, RAAP advocates for refining state policies that could more effectively lower drug costs without risking the stability of the pharmaceutical supply chain. Recommended strategies include cohort strategies to spread the financial load of high-cost therapies, capped copay initiatives, and policies to curb practices that undermine patient assistance programs. Each suggestion is aimed at aligning economic incentives with the overarching goal of improving patient access to medications.
Eging concluded, “The success of our policies should ultimately be gauged by whether patients can consistently access the treatments they need. Presently, the financial benefits are not reaching the patient.” The emphasis is clear: there are viable alternatives to UPLs that promise more effective cost-reduction mechanisms while safeguarding patients' access to essential care.
The Rare Access Action Project continues its efforts in raising awareness and pushing for actionable change, ensuring the voices of patients, particularly those with rare diseases, are heard and prioritized in policy discussions. The full study can be accessed through their website for those looking for a deeper dive into this pressing issue.
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