Colorado Adopts Nation’s First Upper Payment Limit for a Prescription Drug
In early October, Colorado Prescription Drug Affordability Board (PDAB) finalized the nation’s first-ever upper payment limit (UPL) for a prescription drug. The UPL will cap the amount that purchasers and payers within the state can be required to pay for Enbrel, a biologic used to treat autoimmune diseases.
Colorado's Historic Enbrel Upper Payment Limit Decision
In February 2024, the PDAB conducted an affordability review of Enbrel. The PDAB determined the drug to be unaffordable for Colorado consumers and selected the drug for a UPL. Following four rulemaking hearings, the PDAB adopted regulations to set Enbrel’s UPL at $600.00 per 50 mg/mL, which reflects the Medicare maximum fair price (MFP) rounded to the nearest hundred. The PDAB opted to utilize MFP as a benchmark for the UPL, contending that it is a negotiated price that leverages federal research and mechanisms, is significantly lower than other benchmarks, and could lead to savings for payers and consumers.
Implementation Timeline and Industry Preparation
Throughout the rulemaking process, implementation and enforcement were key topics of discussion raised by stakeholders and the PDAB. In response, the PDAB set the UPL’s effective date for January 1, 2027 to allow time for insurers, PBMs, and pharmacies to make operational adjustments. As Colorado moves towards implementation, stakeholders and other states will be watching how the policy impacts access, affordability, and the broader supply chain.
Other States' Prescription Drug Affordability Board Progress
Colorado is one of four states with a PDAB that can set UPLs. Maryland is in the process of considering UPLs for two diabetes drugs, Jardiance and Farxiga, while Washington and Minnesota have yet to formally conduct affordability reviews on any drugs.
Track Health Care Policy with StateVitals
StateVitals is the leading resource on how state governments are shaping healthcare policy and transforming care and delivery, brought to you by MultiState’sHealth Care Policy Practice. MultiState’s policy and advocacy professionals are uniquely positioned to give you and your organization the big-picture view on state health policy reform, plus the latest trends on how policymakers are thinking about healthcare and similar emerging issues. Learn moreabout StateVitals, or schedule a demohere.