Texas lawmakers are right to focus on healthcare affordability this session. Families are struggling under the weight of rising medical costs, employers are paying more to provide coverage, and state healthcare programs are consuming a larger share of taxpayer dollars. But if Texas is serious about lowering costs, lawmakers must focus on the real driver of runaway prescription drug spending: Big Pharma’s unchecked pricing power.
For too long, the healthcare debate has focused on everyone except the pharmaceutical manufacturers that set the prices in the first place. Drug companies hike prices on lifesaving medications with little transparency and even less accountability. Texans end up paying the bill through higher insurance premiums, higher out-of-pocket costs, and growing taxpayer-funded healthcare expenditures.
Texas has already shown national leadership on this issue once before. In 2019, lawmakers passed House Bill 2536, one of the strongest drug price transparency laws in America, which forced pharmaceutical companies to disclose and justify price increases through the Texas Prescription Drug Price Disclosure Program. It was a major step forward because it pulled back the curtain on how manufacturers raise prices.
But transparency alone does not lower costs.
Now Texas has the opportunity to take the next logical step by establishing a Prescription Drug Affordability Board, commonly known as a PDAB. These independent boards review the cost of the most expensive drugs and determine whether prices are creating affordability challenges for patients, employers, and state healthcare systems.
Most importantly, effective PDABs have the authority to establish Upper Payment Limits, or UPLs. These caps prevent drug manufacturers from charging excessive prices for certain medications purchased through state-regulated systems.
This is not some fringe concept. Nine states have already established PDABs, and four states, including Colorado and Maryland, have empowered them to set payment limits. Colorado recently became the first state in the nation to implement a UPL, capping the cost of the arthritis drug Enbrel at $600 per dose after years of price inflation burdened patients and taxpayers alike.
Even Louisiana is moving in this direction. Lawmakers there recently approved legislation creating a PDAB to review the cost of expensive brand-name drugs and biologics.
Texas should not fall behind.
The stakes are especially high because lawmakers across the country have also seen what happens when states pursue the wrong healthcare policies. Arkansas and Tennessee recently passed legislation that has created instability throughout the pharmacy system, threatening access to care and raising concerns about closures, particularly in underserved communities.
Texas must avoid making the same mistake.
When pharmacies close, patients lose more than convenience. Rural Texans lose healthcare access entirely. Veterans lose trusted pharmacists who help manage complex medications. Working families lose neighborhood pharmacies that provide vaccinations, consultations, and critical chronic disease support.
Texas should focus on lowering drug prices without jeopardizing the pharmacy infrastructure patients depend on. That means targeting the source of the problem instead of destabilizing the delivery system. Pharmaceutical manufacturers set the prices. They should be the ones facing scrutiny.
The Texas House Select Committee on Health Care Affordability has an opportunity to chart a smarter path forward. Lawmakers can strengthen the transparency framework already established under HB 2536 and create a strong Prescription Drug Affordability Board capable of holding drug manufacturers accountable when prices spiral out of control.
This approach protects consumers while preserving pharmacy access. It lowers costs for employers without forcing local pharmacies out of business. It saves taxpayer dollars without sacrificing healthcare quality.
Texas has always prided itself on being pro-market, pro-consumer, and pro-common sense. Holding multinational pharmaceutical corporations accountable for excessive pricing while protecting access to local care checks every one of those boxes.
The goal should not simply be more regulation. The goal should be affordability that actually works for Texans.
Dominic Arzon serves as the Deputy Director of the Private Property Rights Institute.
