The "Prescription Drug Cost and Affordability Review Act" aims to establish a comprehensive framework for evaluating the costs and affordability of certain prescription drugs in Michigan. The bill creates a Prescription Drug Affordability Board, composed of five governor-appointed members with expertise in health care economics and clinical medicine, and a Prescription Drug Affordability Stakeholder Council with 21 representatives from various sectors, including manufacturers and patient advocates. The board will select drugs for review based on criteria such as high costs or significant price increases and will conduct affordability assessments to determine if upper payment limits should be set for these drugs.

The legislation mandates that if the board identifies affordability challenges related to a drug's cost, it can establish an upper payment limit, which will not include professional dispensing fees and will not apply to drugs in shortage. It also prohibits prescription drug purchasers from exceeding this limit and requires certain entities to be reimbursed at least the upper payment limit. Additionally, the bill creates a Prescription Drug Affordability Fund to support the board's operations and requires annual reporting to the legislature on price trends and recommendations. The board is also tasked with conducting a one-time study on generic drug pricing and is authorized to create rules and contracts to facilitate its responsibilities.