A federal judge tossed out a lawsuit filed by the pharmaceutical company Amgen challenging the authority of a Colorado board that seeks to rein in high-priced prescription drugs.
U.S. District Court Judge Nina Y. Wang ruled Friday that Amgen had not shown it has or likely will suffer harm from the board’s actions. As a result, she granted the state’s motion to dismiss the lawsuit, but she did so “without prejudice” — meaning Amgen could sue again if it can later show harm.
“The economic injuries alleged by Amgen are too speculative and too attenuated to support standing in this case,” Wang wrote in her order.
The case involved a relatively obscure body known as the Colorado Prescription Drug Affordability Board, or PDAB, which has the authority to set price caps on drugs it deems unaffordable. Since its creation in 2021, the board has been working methodically toward studying, selecting and reviewing which drugs it should target for price caps — focusing especially on those with eye-popping price tags.
That is how the drug Enbrel, which treats rheumatoid arthritis and other conditions, came into the board’s sights. Enbrel has a current list price of more than $2,000 for a standard 50 mg dose, meaning that a year’s worth of treatment could cost more than $100,000. Many patients and insurers pay far less than that, however, because of patient-assistance programs and rebates, respectively.
Amgen reported earning $3.3 billion last year on sales of Enbrel, making it the company’s No. 1 seller and responsible for about 10% of its total product sales.
The PDAB voted last February to declare Enbrel unaffordable. Next week, it is scheduled to begin rulemaking hearings on a price cap for Enbrel.
Amgen sued the PDAB last March, alleging that the board’s decision on Enbrel conflicted with federal laws and violated the company’s rights to due process. Wang’s decision Friday to dismiss the lawsuit turned on a question of harm — whether Amgen has suffered any now or likely will in the future.
Because the PDAB has not actually set a price cap on Enbrel — and it still could choose not to — Wang zeroed in on the likelihood for future harm. But here she confronted the intricacies and absurdities of the pharmaceutical supply chain.
Under Colorado law, the PDAB’s price caps are technically what are known as “upper payment limits.” In other words, they are ceilings for what payors — either patients or insurance companies — will have to pay to buy a drug.
But patients and insurers don’t buy medicines directly from pharmaceutical manufacturers like Amgen; they buy them from pharmacies or, perhaps, wholesalers. So the PDAB’s limits don’t directly affect the price Amgen charges for Enbrel.
To counter this, Amgen argued that “common sense and basic economics” dictate that the pricing impacts will ripple upward, meaning they will have to sell the drug to middlemen for less.
But Wang — noting that pharmaceutical economics can be so screwy that patients sometimes pay more for their drugs than their insurer did and that Amgen’s own CEO, in congressional testimony cited in case filings, described the industry as filled with “counterintuitive pricing behavior” — shot back.
“Nothing in the record defines what the amorphous concepts of ‘basic economics and common sense’ entail, or if such ‘basic economics and common sense’ even apply to the pharmaceutical industry,” she wrote.
In a statement following Wang’s decision, Amgen said it remains concerned about the PDAB’s policies and procedures, which Wang’s ruling did not address. Amgen also said it is considering its next steps in the case.
“Not only is the law unconstitutional, but price controls will not meaningfully address affordability at the pharmacy counter and will instead create new access barriers for many patients,” the company’s statement reads.
The Colorado Consumer Health Initiative, which supported the PDAB law and the board’s work, praised the ruling.
“Pharmaceutical companies like Amgen have placed profits over patients for far too long,” Isabel Cruz, the initiative’s policy director, said in a statement. “Drugs don’t work if people can’t afford them.”
A spokesperson for the Colorado Division of Insurance did not respond to a request for comment.