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By HPN Staff
Key Points
  • Colorado became the first state to set a price cap on a specific prescription drug — limiting the cost of Enbrel, a rheumatoid arthritis treatment, to $600 per 50-milligram dose.
  • Supporters say price caps make medications more affordable, while critics warn they could reduce drug availability, discourage innovation, and push manufacturers to withdraw from the market.
  • Colorado’s move serves as a test case that could influence how other states approach prescription drug affordability and the balance between cost control and market competition.

Colorado’s Prescription Drug Affordability Review Board (PDAB) last week became the first state to set a price cap on a specific prescription drug, limiting a 50-milligram dose of Enbrel, used to treat rheumatoid arthritis, to $600. Since its introduction in 1998, Enbrel’s wholesale price has risen more than 1,500%.

The decision follows a legal challenge from the drug’s manufacturer, Amgen, which argued that PDAB lacked authority to impose limits. A federal judge dismissed the case in March 2024, clearing the way for the board to establish the cap, officially called an “upper payment limit,” which sets the maximum amount insurers and patients can pay.

Why it matters

Free-market advocates warn that state-imposed price caps could produce unintended consequences, including reduced access to lifesaving medications. They say government intervention will disrupt competition, while the U.S. has traditionally encouraged innovation and faster access to new treatments.

A report from the American Consumer Institute Center for Citizen Research found that in European countries where government panels set drug prices, patients had access to fewer than half of the new medicines introduced globally between 2011 and 2018, compared with nearly 90% in the U.S. The report also noted that patients abroad often wait more than a year longer for new treatments.

Drug manufacturers share these concerns. When PDAB previously considered capping Trikafta, a cystic fibrosis therapy, its maker, Vertex, warned that an upper payment limit could leave companies with little choice but to withdraw from Colorado. Similar warnings are expected for Enbrel, as manufacturers weigh the economics of selling in states with price caps.

Patient advocacy groups say such policies could inadvertently limit access to critical treatments. Even intending to make medications more affordable, they caution that some life-saving therapies could become harder to obtain if companies reduce distribution or exit the market.

The big picture

Colorado’s decision comes as other states explore creating drug affordability boards to address rising costs. Supporters argue the boards are needed to hold pharmaceutical companies accountable, particularly as high drug prices burden many Americans.

But price caps could dampen innovation, reduce the availability of new therapies, and limit consumer choice. The outcome in Colorado may serve as a test case for other states considering similar measures, drawing close attention from policymakers, patients, and industry groups. 

As the national conversation on prescription drug affordability continues, Colorado’s experiment highlights the challenge of balancing lower costs with maintaining a competitive market that encourages innovation and broad access to treatments.

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