Federal Judge Blocks Colorado's First-in-the-Nation Prescription Drug Price Cap on Amgen's Enbrel
Key Insights
A federal judge issued a preliminary injunction blocking Colorado's price cap on Amgen's Enbrel, ruling it is likely preempted by federal patent law.
The Colorado Prescription Drug Affordability Board (search) had set the cap at approximately $31,000 per year, down from an effective price of about $58,000 per patient annually.
Chief Judge Daniel Domenico cited binding Federal Circuit precedent from a similar D.C. case, stating Colorado's attempt to "rebalance Congress's patent system is preempted by federal law."
A federal judge has temporarily blocked Colorado's groundbreaking effort to cap the price of a brand-name prescription drug, dealing a significant setback to the state's Prescription Drug Affordability Board (PDAB) and raising broader questions about state-level pharmaceutical pricing regulation.
Chief Judge Daniel D. Domenico of the U.S. District Court in Denver issued a preliminary injunction Wednesday halting the price cap on Enbrel, Amgen's blockbuster rheumatoid arthritis (search) and autoimmune disease therapy. The cap, which was set to take effect in 2027, represented the first time any state had imposed an upper payment limit on a specific prescription drug.
"Since under binding Federal Circuit precedent, caps on the price of patented drugs like Enbrel are preempted by federal law, Amgen's motion must be granted," Domenico wrote in his ruling.
The Price Cap in Question
Enbrel's wholesale cost runs approximately $96,000 per patient per year, though after discounts and rebates, most patients and insurance companies combined pay about $58,000 per patient per year. The PDAB set the price cap at around $31,000 annually.
The drug, which generated more than $2.2 billion worldwide for Amgen last year, treats rheumatoid arthritis (search) and other autoimmune conditions. The PDAB targeted Enbrel after a multi-year process of reviewing drug costs and determining the medication was unaffordable for Colorado patients.
Federal Patent Preemption
Domenico's ruling relied heavily on precedent from a similar case involving the District of Columbia's attempt to impose price controls on patented prescription drugs. In that case, an appellate court determined that such price controls were preempted by federal patent law, which grants pharmaceutical companies a temporary monopoly on their products to encourage research, development, and innovation.
"Colorado's attempt to rebalance Congress's patent system is preempted by federal law," Domenico wrote.
The state had argued that Amgen could not demonstrate it would suffer harm from the price cap, given the pharmaceutical industry's notoriously complex pricing system involving wholesalers, pharmacy benefit managers, distributors, and pharmacies. During a hearing last month, Domenico himself expressed bafflement at the system's intricacies, at one point asking an Amgen attorney, "Why is it such a mess?"
However, Domenico ultimately rejected the state's argument. Addressing the complexity of pharmaceutical pricing, he wrote: "They are right that the system is convoluted, confusing, and often counterintuitive. But it is not necessary to unravel the entire system to understand that, as a result of Colorado's cap, Amgen will receive less money from its wholesalers and will fare more poorly in negotiations with other purchasers in Colorado and elsewhere."
Impact on Colorado's Drug Affordability Efforts
The ruling casts uncertainty over the PDAB's broader mission. The board, created by Colorado lawmakers and Governor Jared Polis in 2021, is composed of members appointed by the governor and tasked with reviewing prescription drug costs on a case-by-case basis. While other states have established similar boards, Colorado was the first to actually impose a price cap.
The Enbrel cap was the only upper payment limit the PDAB had issued thus far, but the board is currently studying potential caps on two other autoimmune drugs: Stelara and Cosentyx. While Stelara is now off-patent, Cosentyx still enjoys U.S. patent protections, making Wednesday's ruling particularly relevant to that ongoing review.
A spokesperson for the Colorado Division of Insurance, which oversees the PDAB, declined to comment citing the pending litigation.
Reactions to the Ruling
Adam Fox, deputy director of the Colorado Consumer Health Initiative, criticized the decision. "This is a step backwards for Colorado and consumers," Fox said in a statement. "Drugs don't work if people cannot afford them and this is yet another example of pharmaceutical companies throwing their weight around to keep their prices high and squeeze all the money they can from consumers."
Amgen expressed satisfaction with the outcome. "We appreciate the court's careful consideration and remain confident in our position as the case moves forward," the company said in a statement.
The preliminary injunction will remain in place at least until Amgen's underlying lawsuit is resolved, a process that could extend for months or longer.