March 25, 2024

The Honorable Glenn Youngkin
Governor of the Commonwealth of Virginia
111 East Broad Street
Patrick Henry Building
Richmond, Virginia 23219

Dear Governor Youngkin,

On behalf of the 42,010 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Virginia, I urge you to veto SB274, which would impose price controls on prescription drugs through the establishment of the Prescription Drug Affordability Board (PDAB). Throughout history, price controls have distorted markets, hurt innovation, and exacerbated the problems they were created to fix.

SB274 would create a five-member Prescription Drug Affordability Board with three alternate board members appointed by the governor.  The legislation would also create an 11- member stakeholder council, including manufacturers, providers, suppliers, and patients.  The board would be charged with reviewing brand-name drugs, biologics, generic drugs, and biosimilars based on increases in the wholesale acquisition cost (WAC) within specific time periods or introductory prices.  The WAC is essentially a list price and does not represent what a patient will pay at the pharmacy after negotiations have occurred among pharmaceutical companies, insurers, pharmacy benefit managers, and pharmacies to lower out-of-pocket patient costs.  The board would have full authority to act if it is determined that a drug price is “too high,” after which an upper payment limit would be established.

Establishing an upper payment limit is a price control that would further distort the medical marketplace and expand government control of the Virginia healthcare system.  If enacted, SB274 would fail to reduce prices and harm patients by stifling the development of new treatments and cures.

Instead of imposing damaging price controls, legislators should contact Virginia’s federal representatives and encourage them to hold the Food and Drug Administration’s feet to the fire for faster generic drug approvals and create an environment that encourages more “me too” drugs that will foster competition among branded pharmaceuticals that are in the same class and still under patent.  A permanent market-based solution will lower prices, not more government intrusion.  I urge you to veto SB274 and refrain from enacting any form of drug price control legislation in Virginia.

Sincerely,
Tom Schatz
President, CCAGW