Colorado has become the first state to place a price cap on a prescription drug. After years of deliberation, the state’s Prescription Drug Affordability Review Board has enacted a cap on the price of Enbrel from Immunex Corp., which is used to treat rheumatoid arthritis and other autoimmune diseases.
“This groundbreaking upper payment limit on Enbrel has the potential to save $32 million from drug spending,” said Sophia Hennessy, lead policy research coordinator for the Colorado Consumer Health Initiative, according to The Colorado Sun. “We’re thrilled with the board’s decision today that helps ensure more patients can afford their vital medications.”
About 60% of the 2,500 Coloradans who take Enbrel are privately insured. The annual cost of the drug in 2023 was about $58,000, of which patients paid around $4,000. The board capped the price at about $31,000 annually, of which patients will pay $600.
The board reached its decision after four years of discussion and debate. Several groups raised concerns that this action could cause manufacturers to withdraw from the Colorado market or for insurers to end coverage for the drug.
“The board has heard, but so far failed to heed, repeated warnings from patients, patient organizations, hospitals, pharmacies and providers of potential unintended consequences of implementing an upper payment limit in Colorado,” a coalition of patient advocacy groups wrote in a letter to the board. “Patients must not bear the burden of policies that are untested, inadequately monitored and unlikely to address the affordability barriers they actually face.”
The review board, formed by legislators in 2021, is empowered to set price limits only after a comprehensive process involving data analysis, surveys, public comment, rulemaking hearings and a series of votes.
The insurance industry cautioned the board about the potential implications of the decision. Insurers may change drug formularies and tiering levels or use utilization management tools, Kevin McFatridge, executive director of the Colorado Association of Health Plans, wrote in a letter to the board.
Pharmacists also have expressed concerns. “It's a very expensive med," pharmacist Ali DiLorenzo told television station Denver 7. "It’s over $7,000. Insurance companies don't really reimburse you. Taking a loss on a quarter of your scripts is not a business.”
Cathy Harshbarger, a health care executive who is a member of the board, is optimistic about how the price cap will play out. “We’re looking at our Colorado residents, and we’re looking at being able to have an impact there,” she said. “I feel comfortable that we’ve really worked hard on the process we have.”
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