Virginia Has the Opportunity to Lead on Lowering Prescription Drug Costs

The high cost of prescription drugs continues to strain families and state budgets alike. Now, Virginia has the opportunity to take a major step forward in lowering drug costs for families at the state level.

The General Assembly is currently considering legislation that would create a Prescription Drug Affordability Board (PDAB), with upper-payment-limit (UPL) authority, and phase in Medicare's newly negotiated prices under the Medicare Drug Price Negotiation program for payers across state-regulated health plans. Beginning as soon as 2027, the bill would apply Medicare's already-negotiated prices for the first 10 drugs to additional state payers beyond Medicare.

If enacted, Virginia would become the first state in the nation to systematically extend Medicare-negotiated savings to non-Medicare populations - creating a clear template for other states to follow.

Why This Matters for States

The affordability crisis in prescription drugs does not fall on any single payer - its costs are distributed across the entire health care system. Medicaid drug spending across states increased 72%, from $30 billion in 2017 to $51 billion in 2023, despite required rebates built into the program. Meanwhile, over 100 million people in the U.S. struggle with medical debt and one third of Americans say that health care costs force them to cut back on basic needs like buying groceries and paying rent.

Recognizing this prescription drug affordability crisis, the federal government took groundbreaking action in 2021 by passing the Inflation Reduction Act, which allowed Medicare to directly negotiate drug prices for the first time ever. The Medicare Drug Price Negotiation Program has already negotiated 25 high-cost drugs, with lower prices for the first 10 drugs in effect as of January 2026. While these 25 drugs cumulatively accounted for nearly $100 billion in combined Medicare and beneficiary spending, the newly negotiated prices represent reductions ranging from 38% to 85% below list prices. Coupled with the new $2,000 annual out-of-pocket cap, negotiated prices are projected to save Medicare enrollees over $2 billion at the pharmacy.

Building on Federal Progress

Several states have created PDABs to address drug affordability. Colorado - and soon Maryland and Minnesota - have relied on the Medicare negotiated prices to align their own upper payment limits. For example, Colorado's PDAB did a review of which drugs were unaffordable, and of that list, chose a drug that was negotiated by Medicare, Enbrel, then set an upper payment limit that was nearly identical to the Medicare negotiated price. Virginia, however, is building on these models and would be the first to have this specific approach that automatically puts into place the Medicare prices without requiring a lengthy affordability review process - demonstrating how other states can bring lower drug prices to people more quickly and with less administrative burden.

The Medicare negotiation program has proved that it works. Now Virginia can do the same. These reforms are proven to lower costs, help improve affordability, and reduce the burden of high drug costs at a time when families need it most.