For five years, Virginia lawmakers have tried to establish a state government entity to artificially set pricing levels for prescription drugs. With a proposal to do so once again on its way to our governor’s desk, it is worth pausing to ask whether this idea — unsuccessful in other states and, here, recast and renamed though it may be — will live up to its title. Unfortunately, it will not.
Senate Bill 271 and House Bill 483 — branded as the “Affordable Medicine Act” — passed the legislature at the close of the session with broad support from lawmakers searching for a solution to an identified problem: burdensome health care costs. Even so, good intentions do not make good policy. Earlier versions of this legislation sought to create an “affordability board” empowered to set its own upper price limits on drugs. The version now on the governor’s desk, amended in the closing days of the General Assembly session, will instead create an “affordability advisory panel” and will import federal maximum fair prices (MFPs), imposed under the federal Inflation Reduction Act (IRA) “negotiations,” and apply those price limits to state-regulated health insurance plans.
Supporters argue that this scheme — adopting federal government-set price caps instead of commonwealth-set price caps — makes the bill less problematic, and that Virginia is simply extending the lower prices already flowing to Medicare recipients. In reality, the dangers of government-enacted price caps on Virginians’ medications remain the same.
Federally “negotiated” price controls, if implemented in Virginia, carry the same fundamental flaws and consequences as state government-set ones would. When drug prices are artificially set below market rates, local pharmacies cannot afford to stock the drugs they are being asked to dispense. As a result, drugs simply will not be on shelves when patients need them — particularly in rural Virginia communities already struggling to keep pharmacies open. This is perhaps the cruelest of ironies: artificial price limits will decrease, and not increase, patient access to medications.
No matter where or how they are imposed, artificially set government-imposed drug prices do not deliver savings to patients at the pharmacy counter. Maryland — the first state to establish a Prescription Drug Affordability Board (PDAB) — has spent more than $3 million in taxpayer money on their version, and it hasn’t saved patients a single cent. New Hampshire repealed its board after five years of excessive administrative expense, yielding no savings to patients. Colorado’s board is mired in litigation. And research shows that federal price-setting has driven increases in annual patient out-of-pocket spending for those selected drugs. Further, a January 2025 survey revealed that 93.2% of independent pharmacists are considering not stocking — or have already decided not to stock — one or more of the federally price-capped medications.
Virginia patients already navigate a complex health care system where pharmacy benefit managers (PBMs) and insurers too often dictate which medicines are accessible and affordable. Adding another bureaucratic barrier will not solve the underlying cost drivers; it only risks compounding them. The patrons themselves have said they want to understand where in the supply chain prices spike and who is accountable. That instinct is right; these bills do not follow through on it.
In addition to being a threat to Virginians’ access to medicine, these bills are a threat to Virginia’s growing biotech economy. They send the wrong signal to potential new companies and investors, just as Virginia’s life sciences industry blossoms. It costs, on average, over $2 billion to develop just one drug, funded mostly by investors who seek an eventual return on their investment. Price caps artificially suppress investors’ expected returns, thus making it less likely for them to pursue investment at all. Artificial prices — whether set in Richmond or imported from Washington — will deter investor interest in Virginia, and will disrupt Virginia biotechnology companies’ ability to develop and bring new medicines to market.
I’ve recently spoken with a major pharmaceutical company currently weighing whether to expand into Virginia, and the passage of this legislation is a factor in their decision. When major pharmaceutical companies Eli Lilly, Merck and AstraZeneca collectively made $12 billion in commitments to Virginia last year, they did so in a Virginia policy environment that supported their choice of Virginia over dozens of other states. This legislation tells future such large biotech companies to beware. At a time when Virginia is successfully attracting and hoping to retain biotech investment, introducing price controls sends the wrong signal.
That we all want Virginians to have access to needed medications should not be in dispute. But the path to lower costs has been littered with state-run prescription drug regulatory schemes that have not yielded patient savings at the pharmacy counter. The Affordable Medicine Act puts Virginia at risk of joining those failed state efforts. Instead, more transparency in drug distribution and pricing is the path toward greater patient access to affordable drugs. We urge Governor Spanberger to put Virginia patients, jobs and innovation first and veto these bills.
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