Within the bewildering behemoth that is the U.S. health care system, the pharmaceutical industry stands out for being particularly opaque and profit-oriented. Americans pay two to five times more than peer nations for the same name-brand drugs. Colorado’s Prescription Drug Affordability Board (PDAB) is changing all that — and the pharmaceutical industry is digging in its heels.
The independent board, composed of doctors and pharmacists with health care economics expertise, is currently undergoing an affordability review process for five of the most expensive drugs in Colorado. This process investigates why we are seeing such high sticker prices, why drugs continue to drive up insurance costs, and why patients are often responsible for outrageous out-of-pocket costs that prevent them from accessing the drugs they need.
The drugs are:
- Cosentyx, used to treat psoriatic arthritis and other autoimmune diseases, ranges from $2,168 to $2,439 in out-of-pocket costs per injection for Colorado patients. Cosentyx continues to be a driving force behind manufacturer Novartis’ profits and the company has actively protected its market exclusivity through strategic patent acquisition, secured through 2030.
- Enbrel, used to treat a variety of conditions including rheumatoid arthritis and psoriasis, costs Coloradans between $2,709 to $3,661 a month in out-of-pocket payments. Initially released 25 years ago, the manufacturer of highly profitable Enbrel, Amgen, has blocked the development of a generic until at least 2029.
- Genvoya, developed to treat HIV-1, costs Colorado patients $1,293 per month. Manufacturer Gilead Sciences has earned over $540 million in Genvoya sales in just the first half of 2023, and holds multiple patents on the drug; it recently reported $8 billion in financial reserves.
- Stelara, used to treat Crohn’s disease, plaque psoriasis, and more, accounted for 10.2% of manufacturer Johnson & Johnson’s $9.7 billion revenue in 2022. In Colorado, the out-of-pocket cost for Stelara falls between $1,399 and $1,404.
- Trikafta is a breakthrough, life-changing treatment for cystic fibrosis. The annual wholesale price for the drug exceeds $322,000 and out-of-pocket costs range between $291 and $1,732. Since its initial release in 2019, Vertex Pharmaceuticals has reported over $17 billion in Trikafta sales. Vertex has refused to reduce prices, restricted its financial assistance program, and spent resources suing a company that produced a generic version of the lifesaving drug and sold it at a lower cost. The last of Vertex’s 77 patents is set to expire in 2037.
The PDAB’s affordability review process creates ample opportunity for industry players to justify the high costs charged to patients and our health care system as a whole.
For years the drug industry has played a convenient game of finger-pointing when it comes to justifying their prices. This scapegoating is just one reason it’s difficult to understand exactly why prescriptions are so expensive and to challenge the status quo.
The transparency measures of the reviews will address this obfuscation and are an important part of PDAB’s mission, but we also know that’s not enough, because nearly one in three Coloradans struggle to afford the prescription drugs they need, cutting pills, skipping doses, or not filling their prescriptions. The skyrocketing cost of prescription drugs forces some families to choose between buying their medications or paying for rent and groceries.
No Coloradan should ever have to choose between paying for basic necessities and taking the medications that will improve their health — or even save their life. That’s why more than 75% of Coloradans supported the creation of a Prescription Drug Affordability Board to reduce the costs of lifesaving medications, and it passed despite massive campaigning and record spending on lobbying by the trade group Pharmaceutical Research and Manufacturers of America (PhRMA) and manufacturer-backed PACs in Colorado.
For these reasons, it’s important that the PDAB fulfill another part of its mission and use its authority to set upper payment limits for drugs deemed unaffordable. This practice has precedence in Colorado (and nationally); the state legislature passed bills to cap insulin prices in 2021, and Epi-Pen prices in 2023.
Through op-eds and ads, manufacturers continue to peddle lies and stoke fear among patients to deflect from the fact that they could price drugs more reasonably while still profiting.
The industry claims that reforms will threaten “competition” and “market dynamics.” But for decades now, manufacturers have been gaming the U.S. patent system to operate as legalized monopolies, controlling those very dynamics and competition and price gouging patients in the process. And let’s not forget that these companies are profiting off of substantial public investment: tax dollars funded every new pharmaceutical in the past decade.
Drugs don’t work if people can’t afford them. Let the PDAB do its work — and let’s not allow the industry groups who value profit over people get in the way of it.
Hope Stonner is the policy manager at the Colorado Consumer Health Initiative, a nonprofit that works to ensure all Coloradans have equitable access to affordable and high-quality health care. She resides in Denver.
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