{"id":438,"date":"2026-06-05T09:32:59","date_gmt":"2026-06-05T09:32:59","guid":{"rendered":"https:\/\/coloradorelocationreport.com\/?p=438"},"modified":"2026-06-05T09:32:59","modified_gmt":"2026-06-05T09:32:59","slug":"a-pharmaceutical-company-is-trying-to-block-colorados-first-in-the-nation-drug-price-cap-in-court","status":"publish","type":"post","link":"https:\/\/coloradorelocationreport.com\/?p=438","title":{"rendered":"A pharmaceutical company is trying to block Colorado\u2019s first-in-the-nation drug price cap in court"},"content":{"rendered":"
\n

Not long into a hearing Thursday over whether Colorado\u2019s first-in-the-nation price cap on a brand name prescription drug should be struck down, the judge appeared flummoxed.<\/p>\n

Read more Less than a year ago, Manny Rutinel staked out different positions on healthcare, student debt and fracking<\/a><\/p>\n

As Chief Judge Daniel Domenico of the U.S. District Court in Denver struggled to piece together how the pharmaceutical market works \u2014 and, therefore, why drugs cost so much and who stands to be hurt by the price cap \u2014 he stumbled over the terminology: WACs and wholesalers and PBMs and chargebacks and rebates. Finally, he just cut right to it.<\/p>\n

\u201cWhy is it such a mess?\u201d he asked an attorney for the pharmaceutical company Amgen.<\/p>\n

That question is what inspired Colorado lawmakers and Gov. Jared Polis in 2021 to create the Colorado Prescription Drug Affordability Board, or PDAB. The board, made up of members appointed by the governor, reviews the costs of certain prescription drugs one-by-one and then decides whether to declare the drug unaffordable. If it does, it can then move on and set a cap on what patients or insurance companies are required to pay for the drug in the state.<\/p>\n

Last year, after years of setting up the board, gathering data and conducting analysis, the PDAB voted to cap the price of the prescription drug Enbrel, which treats rheumatoid arthritis and other autoimmune diseases and which last year brought in more than $2.2 billion worldwide for Amgen. While other states have also established PDABs, Colorado became the first state in the country to impose a cap on the price of a specific prescription drug.<\/p>\n

Amgen sued to overturn the cap \u2014 which is set to go into effect next year \u2014 and Thursday\u2019s hearing was to debate whether Domenico should issue a temporary injunction blocking the pricing measure while the lawsuit is pending. At the conclusion of the hearing, Domenico said he would issue a written ruling soon.<\/p>\n

Health initiatives under threat<\/h2>\n

The hearing was emblematic of the precarious footing for numerous progressive health policy initiatives undertaken during Polis\u2019 administration, which is now in its waning months.<\/p>\n

Polis made reforming the healthcare system a major focus early in his administration. He established an Office of Saving People Money on Health Care and, along with Democratic allies in the state legislature, pursued policies to give state regulators more muscle to slash healthcare prices.<\/p>\n

In addition to the PDAB, Polis championed a plan to import lower-cost prescription drugs from Canada. He backed health insurance initiatives like a program called reinsurance that helps insurance companies pay their highest-cost claims, as well as a government-designed insurance plan called the Colorado Option.<\/p>\n

But, as the Polis administration nears its end, the fate of all those initiatives is uncertain.<\/p>\n

The effort to import drugs from Canada is stalled, awaiting the federal government\u2019s approval. Even if that comes, it\u2019s unclear if Canada and the pharmaceutical industry will go along.<\/p>\n

While the Polis administration argues that the Colorado Option has provided better value to customers shopping for health insurance and has kept rates lower than they would have been, the program has not achieved the ambitious reductions in insurance prices it aimed for.<\/p>\n

Read more Colorado declares statewide drought emergency<\/a><\/p>\n

The reinsurance program, which the state estimates has saved consumers more than $2 billion on their insurance premiums, is facing reduced funding from the federal government due to the expiration of certain federal health insurance subsidies. Lawmakers have patched together solutions for two years to keep the program at full strength \u2014 the latest involving a complicated plan to issue bonds to fund the program \u2014 but have yet to identify a sustainable funding source.<\/p>\n

And now Amgen\u2019s lawsuit could significantly constrain what the PDAB can do.<\/p>\n

Patent upending<\/h2>\n

Amgen argues that the price cap should be struck down for interfering with federal patent law.<\/p>\n

In selecting Enbrel for a price cap, the PDAB focused on drugs for which there are no lower-cost generic alternatives available. This means it zeroed in on drugs still covered by patent protection, Amgen argues. It\u2019s why the PDAB didn\u2019t also target the competitor drug Humira, which is similarly expensive but is also now off-patent, the company says.<\/p>\n

That\u2019s a problem, Amgen argues, because federal patent law for pharmaceutical companies exists to promote research and development in exchange for offering companies an exclusive window to sell their products at whatever price they can get.<\/p>\n

In summarizing Amgen\u2019s argument, Domenico called this \u201ca big carrot\u201d for innovation. Capping the price, then, takes a giant chomp out of the carrot.<\/p>\n

On the other side, the state argues that Amgen hasn\u2019t actually shown that the price cap will hurt it. Technically, the cap is not a cap on the price Amgen charges but an \u201cupper payment limit\u201d on what the end purchaser \u2014 either a patient or an insurance company \u2014 pays. Those end purchasers aren\u2019t buying the drug from a pharmacy, and in between the pharmacy and Amgen there could also be a distributor and a pharmacy benefit manager.<\/p>\n

So which one stands to lose money from the price cap? Domenico asked the attorney representing the state.<\/p>\n

\u201cI think it\u2019s unclear, your honor,\u201d answered Senior Assistant Attorney General Pawan Nelson, citing \u201ccounterintuitive pricing behavior\u201d in the pharmaceutical industry.<\/p>\n

To Amgen\u2019s attorneys, the answer is obvious. No wholesaler is going to pay more to acquire Enbrel than they can charge to sell it, meaning the price cut will ultimately travel upward into Amgen\u2019s bottom line.<\/p>\n

\u201cI recognize that there is complexity,\u201d attorney Paul Mezzina said. \u201cBut I don\u2019t think anybody is confused about how this works.\u201d<\/p>\n

To which Domenico, the judge now charged with making sense of this dispute and rendering a coherent ruling, answered back deadpan:<\/p>\n

Read more Visits to Colorado ski resorts collapsed in 2025-26 with the steepest annual decline in decades<\/a><\/p>\n

\u201cWell, I am.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The pharmaceutical company Amgen has sued Colorado to block a drug price cap imposed by the state’s Prescription Drug Affordability Board<\/p>\n","protected":false},"author":1,"featured_media":437,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":["post-438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-health"],"yoast_head":"\nA pharmaceutical company is trying to block Colorado\u2019s first-in-the-nation drug price cap in court - Colorado Relocation Report<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coloradorelocationreport.com\/?p=438\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A pharmaceutical company is trying to block Colorado\u2019s first-in-the-nation drug price cap in court - 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