Amgen, the multinational pharmaceutical company that makes the blockbuster arthritis drug Enbrel, has sued Colorado over a state board’s efforts to possibly cap the price of the drug.
In a lawsuit filed Friday in U.S. District Court in Denver, Amgen argues that the actions of Colorado’s Prescription Drug Affordability Board are unconstitutional because they conflict with federal laws and because they violate rights to due process. The company is seeking not just to overturn the board’s recent decisions about Enbrel but also to strike down major parts of the law creating the board.
“We have significant concerns with the Colorado Prescription Drug Affordability Board’s decision to move forward with its flawed policy and process,” Amgen said in a statement. “There is no legal basis for the Board’s actions or haphazard process throughout the review period.”
A spokesperson for the Colorado Division of Insurance, which houses the affordability board, said they could not comment on pending litigation.
Colorado lawmakers, backed by Gov. Jared Polis, created the Prescription Drug Affordability Board, or PDAB, in 2021 with the goal of lowering prescription costs. The board has the ability after extensive review to set so-called upper payment limits — basically, price caps — on drugs it deems unaffordable.
Its first reviews of prescription drugs brought outcries from patient groups worried that price caps would cause their needed drugs to be pulled from the market in Colorado. But, last month, the board voted unanimously to declare Enbrel unaffordable, setting in motion a roughly six-month process to weigh whether to become the first state to place a price cap on a prescription medication.
Enbrel is an injectable drug used to treat rheumatoid arthritis and other conditions. According to Amgen, its list price is $1,762.34 per 50 mg dose, meaning a full year of treatment for some patients could stretch over $90,000. But Amgen’s patient-assistance programs mean almost no patients pay the list price out-of-pocket. Insurance companies pick up a large majority of the bill, even for patients who don’t receive financial help.
Amgen reported making about $3.7 billion from Enbrel sales worldwide in the 2023 fiscal year, down 10% from the year before.
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In its lawsuit, Amgen argues that Colorado’s PDAB law violates the U.S. Constitution’s supremacy clause by seeking to override federal patent laws.
“To incentivize the immense risk-taking and investment necessary to discover and develop new medical treatments, Congress has established a carefully calibrated intellectual property regime that rewards pharmaceutical innovation with a period of market exclusivity and the ability to charge prices that allow for further investment and innovation during that period,” the lawsuit states.
Amgen says the law also potentially interferes with Medicare’s ability to control its pricing decisions. And the company also argues that the law seeks to regulate transactions that occur outside of Colorado in violation of the Constitution’s commerce clause.
Lastly, Amgen argues that Colorado’s law is too vague and leaves too many of the fine-print details up to the PDAB to decide, creating due process violations. This “fails to provide drug manufacturers with a meaningful opportunity to be heard and fails to protect them against erroneous deprivations of their property,” the lawsuit states.
The lawsuit has been assigned to U.S. District Court Judge Nina Y. Wang, who was appointed to the bench by President Joe Biden in 2022. Amgen is asking Wang to strike down PDAB’s authority as it relates to patented drugs, federal health care programs and out-of-state transactions. It is also seeking an order barring the PDAB from enforcing its decisions on Enbrel.
The state has yet to file a response to the lawsuit.
Priya Telang, a spokeswoman for the Colorado Consumer Health Initiative, which supported the PDAB’s creation, called the lawsuit “unfortunately expected.”
“It’s a well-known practice that pharmaceutical companies sue to protect profits and excessive prices,” Telang wrote in an email. “In this case, it’s just another example of them putting profits over patients, regardless of the harmful impact high-cost drugs have on those patients.”