Determining Upper Payment Limits: Considerations for State PDABs

This white paper presents three potential strategies state PDABs may use to set upper payment limits (UPLs) for drugs deemed unaffordable: reference pricing, net price benchmarking, and budgetary threshold analyses. It explores the strengths and limitations of each approach and emphasizes that strategies are not mutually exclusive and should be tailored to the underlying drivers of a drug’s unaffordability.