I am here today to talk about Colorado’s experience setting an Upper Payment Limit (or UPL).
Last fall, Colorado’s Prescription Drug Affordability Board (or PDAB) unanimously voted to set a UPL on Enbrel, a high cost drug that treats a variety of autoimmune diseases. The UPL was set at $600 per standard unit (approximately $30,000 per year); a roughly 40% reduction over the average insurance plan paid per person in our state.
This UPL represents the maximum price anyone can pay for Enbrel in Colorado and applies to all purchases and payer reimbursements in the state. Under our state law, the savings from this UPL must be passed down to consumers in the form of lower out-of pocket costs and premiums. In a moment of unaffordability and budget cuts, our UPL on Enbrel stands to return a gross estimate of $38 million dollars to Coloradans.
Prior to setting this UPL, our PDAB completed a thorough affordability review of Enbrel, did extensive price analysis and held a series of four public hearings on the matter. Board members also review proprietary and voluntarily submitted data. I would be happy to share the staff memo that outlines all data used in the UPL process.
Our UPL on Enbrel that roughly matches the Maximum Fair Price that was negotiated at the federal level with manufacturers for use in the Medicare market. Our board believes this federal MFP represents the best available price benchmark for Enbrel.
While we are so excited about this UPL we want to emphasize that our Board’s work has not happened without pushback. Big PhRMA was the biggest lobbyist by spend in our state when Colorado passed our PDAB and we aren’t surprised this resistance has continued. Our board faces a lot of opposition including from various national groups and multiple lawsuits. However, despite all this pushback our board still saw fit to set a UPL and they are continuing their impactful work.
Looking forward, the UPL on Enbrel will go into effect for the 2027 plan year. In the meantime, our Board is developing strategies to evaluate the implementation of the UPL to ensure patient access remains protected and unintended consequences are quickly triaged. Our Board is also gearing up to start a second round of affordability reviews and beginning their UPL processes for Cosentyx and Stelara – the two other drugs our PDAB deemed unaffordable in our first round of affordability reviews. Like Enbrel, both Cosentyx and Stelara have also been selected by the federal government for the Medicare Drug Price Program and we are hopeful this alignment will once again give strong backing to the Board’s UPL processes.
I would like to end by emphasizing that there are many ways our health care systems need reform, however unlike solutions like OOP cost caps, UPLs don’t push the costs elsewhere but they take action at a root cause of skyrocketing health care prices – the exorbitant cost of prescription drugs.
Thank you for allowing me to speak today and I would be happy to answer any questions.
Sophia Hennessy, Policy and Research Coordinator
Resources:
- CO PDAB staff memo on the data considered the UPL process
- Current Lawsuit brought by Amgen against CO’s PDAB for the UPL on Enbrel: In discovery