HA545 Unit 7 Drug Affordability Eightfold Path Example

Eight Steps Toward a Lower Drug Bill: A Policy Analysis Framework Working Bardach's Eightfold Path in Order on a Composite State's Options for Prescription Drug Affordability, From a Board With Upper Payment Limits to Pricing Its Employee Plan Off Medicare's Negotiated Rates

[Student Name]

Purdue University Global

HA545: Health Policy

Unit 7 Policy Analysis Framework

[Instructor Name]

[Date]

The state, its plan and every figure are composite and bracketed for the writer's own data; the federal program and other states' boards are real.

Step 1: Define the Problem

Bardach asks for a problem stated without a solution built into it. Product: the state employee plan's drug spending grew [11] percent a year for three years, three times faster than its other costs, while [14] percent of members reported skipping a prescription because of cost in the plan's member survey.

Step 2: Assemble Some Evidence

Product: an evidence list, each item labeled for source and possible bias. Plan claims data: reliable, internal. National research: high US prices for brand-name drugs follow largely from market exclusivity and limited negotiating power, rather than research costs alone (Kesselheim et al., 2016). Other states' boards: early reports, written by the boards themselves, so possibly optimistic. Manufacturer statements: biased toward warning of lost access.

Step 3: Construct the Alternatives

Product: four alternatives. A. Create a prescription drug affordability board that can review high-cost drugs and set upper payment limits, the most that state-regulated payers may pay. Colorado's board became the first to find a drug unaffordable, in 2024. B. Require transparency reporting only: manufacturers report price increases and justifications. C. Pay no more than Medicare's negotiated price in the state employee plan, for drugs that have one. Medicare's first negotiated prices took effect in 2026 under the federal negotiation program (42 U.S.C. § 1320f, 2024). D. Join a multistate purchasing pool to negotiate rebates.

Step 4: Select the Criteria

Product: a criteria table, each defined tightly enough that every alternative is judged on identical terms. Effectiveness: projected annual savings to the plan. Legal risk: likelihood of a successful challenge. Feasibility: what the state must build and how fast. Political acceptability: support from legislators and stakeholders.

Step 5: Project the Outcomes

Product: an outcomes matrix. A. Savings uncertain and delayed, [$0] to [$9] million a year after [three] years; high legal risk; a new board and staff; mixed acceptability. B. Savings near zero; low legal risk; light build; high acceptability. C. Savings [$4] to [$6] million a year on the few drugs with Medicare prices; moderate legal risk, mainly over whether a plan can refuse to pay more; light build, since the plan sets its own payment; moderate acceptability. D. Savings [$1] to [$3] million; low legal risk; light build; high acceptability. The option with the largest possible savings is also the slowest and the most likely to end up in court.

What the Five Costliest Products Show

A closer look at the plan's claims makes the alternatives concrete. Of the five products that made up a fifth of spending, [three] are among the drugs with Medicare negotiated prices from 2026, [one] is a biologic facing new biosimilar competition and [one] is a recent specialty drug with no competitor. Alternative C would reach the first three at once. Biosimilar uptake, a plan formulary decision outside these four alternatives, would address the fourth. Only an affordability board, alternative A, could reach the last. That pattern explains why the decision pairs a fast, narrow step with a slower study of the broad one.

Step 6: Confront the Trade-Offs

Product: a paragraph comparing the two leading alternatives. A offers the largest potential savings and reaches all state-regulated payers, but its savings depend on rules not yet tested in court, and manufacturers have sued other states over their boards. C offers smaller but faster savings, limited to the employee plan and to drugs with Medicare prices, and the plan controls its own payments. A protects more people later; C protects fewer people sooner.

Step 7: Decide

Product: a decision. Adopt C now, with D as a low-cost addition, and study A for two years while other states' boards are tested in court.

Step 8: Tell Your Story

Product: a summary that could stand alone. "The state employee plan's drug costs are rising three times faster than its other costs. The fastest way to save without a new agency is to pay no more than Medicare's negotiated prices for the drugs that have them, saving an estimated [$4] to [$6] million a year starting next plan year. A broader affordability board could save more but faces legal challenges elsewhere; the state should watch those cases for two years before deciding."

Why the Framework Helps

Bardach and Patashnik (2020) note that the steps need not be followed rigidly, but following them in order here stopped the analysis from jumping to the most popular idea, an affordability board, before testing it against criteria.

Limits

Savings projections rest on assumptions about utilization and on prices that may change. Legal risk is a judgment, not a forecast, and it could change quickly as courts rule on other states' boards and on the federal negotiation program itself.

References

Bardach, E., & Patashnik, E. M. (2020). A practical guide for policy analysis: The eightfold path to more effective problem solving (6th ed.). CQ Press.

Kesselheim, A. S., Avorn, J., & Sarpatwari, A. (2016). The high cost of prescription drugs in the United States: Origins and prospects for reform. JAMA, 316(8), 858-871. https://doi.org/10.1001/jama.2016.11237

42 U.S.C. § 1320f (2024). https://www.law.cornell.edu/uscode/text/42/1320f