Colorado's Prescription Drug Affordability Board has made history by establishing the nation's first state-level price ceiling on a prescription medication, setting a maximum payment limit of $600 per unit for Amgen's arthritis drug Enbrel. The landmark decision creates an upper payment limit that applies to both government agencies and commercial health plans serving Colorado residents.
Significant Cost Reduction for Patients
The new price ceiling translates to approximately $31,200 annually for adults who typically take the standard 50-milligram weekly dose, compared to the roughly $53,000 that average insurance plans in the state paid per person in 2023. For children with juvenile arthritis, who require about half the adult dose, the maximum annual cost would be approximately $15,600.
According to state data, Colorado patients previously paid an average of $4,600 annually out of pocket for Enbrel, while insurance companies covered the remainder of the approximately $53,000 yearly cost. The impact on individual patient costs will vary depending on their specific insurance plan structure.
Alignment with Federal Pricing Standards
The Colorado board based its decision on Medicare's "maximum fair price" of approximately $584 per unit, which is set to take effect in the federal program in January. Under federal law, the Centers for Medicare and Medicaid Services must consider multiple factors when establishing this price, including production costs, whether the manufacturer has recouped its development investment, federal support received during development, and sales data.
The board's analysis revealed that Enbrel's wholesale price had increased more than 1,500% since its market debut in 1998 and approximately 40% over the previous five years, leading to last year's determination that the drug was "unaffordable."
Industry and Legal Response
Amgen has challenged the state's actions through litigation, having sued Colorado following the board's initial affordability determination. A federal judge dismissed the lawsuit in March, with Judge Nina Wang ruling that the company had not proven it would suffer harm. Amgen would need to demonstrate that the state's maximum payment limit is low enough to force wholesalers to pay less than current rates. The company has appealed this ruling.
Following the price ceiling announcement, Amgen stated that "the board's actions will create new access barriers for patients without improving affordability at the pharmacy counter," while maintaining its commitment to "driving access and affordability solutions for Enbrel patients."
The Pharmaceutical Research and Manufacturers of America criticized the decision as a "reckless experiment" that fails to address the underlying drivers of high patient costs. Spokesman Reid Porter argued that "Colorado is risking patient access and jeopardizing the development of new medicines," drawing comparisons to concerns about the Medicare negotiation program under the Inflation Reduction Act.
Patient Advocacy and Treatment Access
Patient advocates have welcomed the decision as a necessary step to address medication affordability. Denver resident Rae Wall testified to the board about the financial burden of chronic illness treatments, stating, "I'm all too familiar with what it is like to struggle to afford lifesaving drugs, having to decide whether or not I spend my grocery budget for the entire month on a refill."
Enbrel treats six autoimmune conditions involving the immune system attacking joints, skin, and other tissues, making it a critical medication for patients with rheumatoid arthritis, psoriasis, and related conditions.
Implications for Healthcare Policy
The Colorado decision establishes a precedent that other states may follow in pursuing similar strategies to contain prescription drug spending. However, uncertainty remains about potential industry responses, including whether pharmaceutical companies might restrict sales to states implementing price ceilings, particularly when the maximum price exceeds production costs.
The actual impact on individual patients will depend on their specific insurance plan structures. Those with flat copay arrangements may see no change in out-of-pocket costs, while patients whose plans require percentage-based cost-sharing could experience reduced expenses under the new pricing limit.
