Colorado’s Prescription Drug Affordability Review Board will vote for the first time on Dec. 8 whether a medication is so unaffordable that the state should consider an upper payment limit — a decision that both PDAB advocates and critics say will come with significant reverberations.
The drug at question is Trikafta, a medication to treat cystic fibrosis that has been described as life-changing in its effectiveness but that carries an average yearly cost of $234,439, including an average annual out-of-pocket expense for Colorado patients of $8,906,63. It was one of five prescription drugs the PDAB singled out in August to undergo affordability reviews, and it’s the first of them that the five-member board will put to its judgment.
If PDAB members determine that the drug is unaffordable, they will turn around on Dec. 15 and decide whether the state should set an upper payment limit, which would effectively cap the price at which it could be sold in Colorado. While there are six other states that have passed laws to launch boards with functions similar to PDAB, Colorado is furthest along in its process, meaning that eyes across both the state and the country will be on the decision.
Pharmaceutical manufacturers and health-care watchdog groups say the vote is hugely important for different reasons. Groups like the Colorado BioScience Association warn that potential price caps will dry up investment in the sector, while organizations like the Colorado Consumer Health Initiative say taking that critical step would create a new tool in their efforts to try to limit drug pricing.
Legislators add their voices on prescription drug affordability
But the vote also has attracted the attention of a bipartisan group of 19 legislators who sent a letter to PDAB members on Sept. 27 urging them not to proceed with imposition of an upper payment limit for Trikafta. Led by Sen. Dafna Michaelson Jenet, a Commerce City Democrat who chaired the House Public and Behavioral Healthcare and Human Services Committee before being selected to replace Sen. Dominick Moreno following his resignation, the group expressed concerns about limiting pricing on an orphan drug for which there is no credible alternative.
In many ways, the Dec. 8 decision will signal only how the board wants to proceed on consideration of Trikafta and should not influence decisions on other drugs, CCHI policy manager Hope Stonner said in an interview. Her group and others believe that PDAB must consider whether price caps are appropriate even on orphan drugs — a term that she argues is used very broadly at times — because the board’s purpose is to determine how to help people afford life-saving medication.
“I do think that this call around the blanket orphan-drug designation is fairly textbook pharmaceutical-manufacturer playbook,” Stonner said. “What I think we’d continue to see is calls for future bans on orphan drugs.”
But pharmaceutical companies and groups representing the users of one-of-a-kind drugs like Trikafta have warned that drug manufacturers, if they cannot make a proper return on their significant investment because of price caps, could refuse to sell those drugs in certain states. And Michaelson Jenet noted that the state’s Prescription Drug Affordability Advisory Council recommended against putting price caps on orphan drugs — a suggestion she’s considered turning into a bill but would prefer the PDAB enact administratively on Dec. 8.
How the vote could impact drug development
“I’m hearing from other disease communities who are very nervous about their drugs being considered,” said Michaelson Jenet, who supported creation of PDAB and expansion of its powers but said during debate on the House floor that it should not limit prices on orphan drugs for fear of limiting access. “I think that part of the concern with PDAB is: Where do we draw the line?”
The CBSA has been one of the leading voices in arguing that creating the PDAB in the first place crossed the line of acceptable regulation, and it’s stepped up its concern in recent months via letters to both Gov. Jared Polis and PDAB members stating concern over their actions. Part of those concerns involve a process that its leaders feel has been less than fully transparent – a concern that legislators echoed by saying that some stakeholders aren’t feeling heard — but many worries reach back to what they believe are the consequences that will follow.
CSBA President/CEO Elyse Blazevich noted in a Sept. 28 missive to Polis that studies evaluating the potential impact of federal prescription-drug price controls through the Inflation Reduction Act could reduce biopharmaceutical-supported output in Colorado by $935 million. With many drugs requiring a decade of research and development at costs that can exceed $2.5 billion, the potential to limit investment return will cut private funding and cost jobs, she argued.
“When we look at the fundraising landscape … capital markets already are constricted, and investors are doing everything they can to avoid risk,” Blazevich said in an interview. “As you introduce more risk and uncertainty and unpredictability in these early-stage companies, it’s causing pause for investors.”
The case for upper payment limits
PDAB members will have to weigh those fears against the concerns that fueled the creation of PDAB — that some prescription drugs are becoming so expensive that patients are having to choose between paying for them or paying other bills and having to go without meds. Dr. Chet Cedars, a Greenwood Village family-medicine physician, said during a news conference put on by the Committee to Protect Health Care last month that it’s frustrating to see corporations threaten to withhold drugs from the market “to protect their astronomical profits.”
In making affordability decisions, PDAB members will consider factors including overall drug prices, out-of-pocket costs for patients, the wholesale acquisition cost increase of drugs in recent years, the number of Coloradans using each drug and the orphan status of a drug. Colorado Insurance Commissioner Michael Conway, responding to the letter from the 12 Democratic and seven Republican legislators, noted patients and payers footed bills for more than $75 million for Trikafta in 2021 — the second-highest amount for any drug in Colorado.
Conway also defended the transparency and public accessibility of the PDAB process thus far and argued that there is no need for the Legislature to consider further action because the board is following the law exactly as elected officials drafted it.
How will this change prescription drug affordability?
“The law calls on the Board to consider orphan drug status and input from patients themselves as part of the affordability review. That is exactly what the Board is doing,” Conway wrote. “The Board is actively considering the orphan drug status of Trikafta and input from patients during the affordability review.”
After the Trikafta decision, the board next year will consider the affordability of autoimmune-disease drug Enbrel and HIV treatment Genvoya. Amy Goodman, CBSA counsel for policy and advocacy, said that while drug manufacturers will feel financial strain from any price caps, she expects patient groups dependent on each chosen drug will continue to express concerns just as loudly that their ability to stay healthy through use of the drug must be considered.
“Patients are concerned that these kinds of government price controls may make it take longer for drugs to get to market,” Goodman added.