Hogan Veto of Drug Board Funding Bill Baffles Advocates

The architects of the state’s fledgling Prescription Drug Affordability Board are urging the General Assembly to override Gov. Lawrence J. Hogan Jr.’s veto of a measure to fund the panel’s operations.

Senate Bill 669 and House Bill 1095 would set up a funding source for the panel, which was created in 2019 and began meeting for the first time this year.

The board was established by lawmakers to identify ways of reducing the cost of prescription drugs, an issue that consumers and policymakers have said is a major obstacle to improving health care outcomes.

Hogan (R) vetoed the legislation — and other revenue-raising bills — on Thursday. In a letter to the Senate President and Speaker of the House of Delegates, Hogan said: “These misguided bills would raise taxes and fees on Marylanders at a time when many are already out of work and financially struggling. With our state in the midst of a global pandemic and economic crash, and just beginning on our road to recovery, it would be unconscionable to raise taxes and fees now.”

On Friday, Vincent C. DeMarco, the head of the Maryland Citizens’ Health Initiative, said the organization is “very disappointed and confused by this veto.”

“The state is lending the board $750,000. By vetoing this bill, the governor is preventing the board from giving the money back,” he said. “So at this time of tight state budgets, the governor is taking $750,000 out of the state’s coffers. It doesn’t make any sense.”

Under the 2019 legislation that created the board, it will receive state funds on July 1, when the new fiscal year begins. The law requires the board to identify a way to fund its operations by Dec. 31 and to repay the loan from the general fund starting next year.

The bills approved this year would raise up to $2 million by establishing an assessment on drug manufacturers, insurers and pharmacy benefits managers. The board would then use those funds to hire researchers to investigate why many drugs have sky-high prices. They would also recommend ways to reduce drug costs.

The Senate version of the bill was approved unanimously, 45-0. The House bill was approved in a partisan vote, 98-36. Both votes occurred late in the truncated General Assembly session, during a rare Sunday workday.

DeMarco praised Hogan for allowing another high-profile health care measure to take effect without his signature.

Senate Bill 872 and House Bill 959 would enshrine key planks of the federal Affordable Care Act into state law, to protect consumers in the event the U.S. Supreme Court overturns Obamacare.

The Maryland Citizens’ Health Initiative called that measure “a major step forward for the state.”

The creation of the Prescription Drug Affordability Board was vigorously opposed by groups that lobby on behalf of pharmaceutical firms.

With Congress disinclined to act on the issue of high drug prices, DeMarco has said Maryland’s landmark drug board could offer a road map for other states. The Maryland Citizens Health Initiative has sent staff to several states that are looking into the concept.

Hogan’s veto of the funding measure worries the board’s advocates.

“It sounds like he’s taking the side of Big Pharma against Maryland patients,” DeMarco said.

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