Colorado's pathfinder medicine price-cap move stalls

 A federal judge in the US has sided with Amgen in a dispute over a price cap imposed by the state of Colorado on its blockbuster immunology drug Enbrel.

In a move viewed as a test of states' ability to impose drug pricing controls, the Colorado Prescription Drug Affordability Review Board (PDAB) placed a $600-per-week price cap on the drug last October for a standard weekly dose – about $31,000 per year – but almost 50% lower than typical prices in the state in 2023.

The first-of-its-kind price cap has been overturned by Judge Daniel Domenico in the Denver federal court, who accepted Amgen's request to impose a preliminary injunction on the cap – known as an upper payment limit – on the grounds that it is pre-empted by federal law and violates due process and commercial rights.

In its lawsuit, Amgen claimed the upper payment limit for Enbrel (etanercept), a widely used TNF inhibitor for diseases like rheumatoid arthritis, would cause it to "suffer substantial, irreparable harm."

The company made almost $2 billion from the brand last year in the US, out of global sales of $2.23 billion, although, sales have been falling steadily from a peak of more than $8.5 billion in recent years since the start of biosimilar competition overseas. In the US, biosimilars have been approved, but are blocked from launch by ongoing patent litigation and are not expected to reach the market until 2029.

"Both parties make important, and persuasive, policy arguments," wrote Domenico in his ruling on the case.

"Colorado is undoubtedly correct that the price of many beneficial medications is difficult, if not impossible, for many citizens to afford," he added. "Amgen is correct that the development of the new medications many of us benefit from requires that profits from the few successful ones be large enough to cover not only their own development, but that of dozens of failed experiments."

He pointed out, however, that these "policy issues" are not relevant to the case under consideration, as "under binding Federal Circuit precedent, caps on the price of patented drugs like Enbrel are preempted by federal law."

The PDAB had contended that Amgen would not be harmed by the cap because of the convoluted way Enbrel is paid for at various levels of the supply chain, which is typical of the US market and makes it hard to tease out accurate pricing data.

Domenico wrote that drug pricing is remarkable for its "puzzling opacity," but added that 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."

He advised the PDAB to try to reduce Enbrel's price through subsidies or negotiations to lower prices, as has been done by the federal government through the Medicare system.

The preliminary injunction pauses the cap, which had been due to come into effect at the start of next year, while the underlying lawsuit proceeds.

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