Colorado Declared a Drug Unaffordable. Federal Law Says That's the One Thing It Can't Fix.

Colorado did everything the process asked of it. It spent four years building a board, gathering data, and reviewing drugs one by one. It examined Enbrel — the autoimmune blockbuster whose US wholesale price has risen more than 1,500% since 1998 — and formally declared it unaffordable. Then it did what no US state had ever done: it set a cap, at roughly $31,000 a year, about half the $53,000 insurers had been paying.

On 1 July, a federal judge struck the cap down.

Not because the finding was wrong. Judge Daniel Domenico did not dispute that Enbrel is unaffordable for many of the people who need it — he said so explicitly. He struck the cap down because Enbrel is patented, and under binding federal precedent, a state capping the price of a patented drug is preempted by federal patent law. The one fact everyone in the courtroom agreed on — that the drug costs too much — turned out to be the one thing the state had no power to change.

This is not a story about whether a state can cap a drug price. It is a story about a state discovering it may cap only the drugs that don’t need it.

Colorado’s Prescription Drug Affordability Board was created in 2021 as the centrepiece of the governor’s effort to lower drug costs. It moved slowly and deliberately, and Enbrel was the first and only drug it ever capped. The upper payment limit was due to take effect in January 2027. Amgen sued, and the injunction now freezes the cap while the underlying case proceeds — which could take a year or more.

The ruling is almost poignant in its even-handedness. The judge accepted that many Americans cannot afford vital medicines. He also accepted Amgen’s point that the profits from a handful of successful drugs must cover the many that fail. But he ruled that these are policy questions, and policy is not the issue — the law is. Caps on patented drugs, he wrote, citing an earlier decision that struck down the District of Columbia’s attempt to control patented-drug prices, are preempted. Full stop.

He even offered Colorado a consolation: use other tools. Subsidise the drug, or negotiate a lower price, as the federal government does through Medicare. But a state cannot compel a manufacturer to the negotiating table, and subsidies spend taxpayer money to leave the price itself untouched. The court left Colorado with instruments that do not bite, and forbade the one that does.

The court agreed the drug was unaffordable. It simply ruled that unaffordability is not a problem the state is allowed to solve.

Here is the structural trap, and it is worth stating plainly because it dooms far more than one cap.

An affordability board, by design, goes after the drugs that hurt most — the ones with no lower-cost alternative. That is precisely why Colorado picked Enbrel and not, say, Humira, which is comparably expensive but now faces biosimilar competition. A drug with no cheaper alternative is, almost by definition, a drug still under patent. And a drug still under patent is exactly what a state is preempted from capping.

So the tool is permitted to cap only drugs that already face competition — the ones whose price the market is already pulling down, the ones that least need a cap. And it is forbidden from capping the drugs with no competition — the only ones that actually do. The mechanism is built to miss the exact target it was created to hit.

A state may cap the drugs that don’t need capping, and not the ones that do.

Look at what actually keeps Enbrel expensive, and the ruling stops looking like an accident.

Enbrel is insulated from every mechanism that could lower its price — and the same patent estate does all of it. There are no generics, because it is a biologic. There are no biosimilars either, though the FDA approved two of them years ago — Sandoz’s in 2016, Samsung Bioepis’s in 2019 — because Amgen built a patent thicket that blocks them in the United States until April 2029. The original patent expired around 2010; a later set of patents, most of them filed after the drug was already on the market, extended exclusivity to thirty-one years. One analysis found that 72% of Enbrel’s patent applications were filed after approval. And now the third shield: a state price cap, blocked by the patent.

The proof that these patents manufacture the price, rather than merely reward the invention, sits across the Atlantic. In Europe, where those biosimilars launched in 2016, Enbrel’s price fell by roughly half within a year. In the United States, with no biosimilar allowed, the price kept climbing. The patent did not just protect Enbrel’s price — it created the unaffordability that Colorado then tried, and was forbidden, to fix.

The patent that made Enbrel unaffordable is the same patent that makes it uncappable. The disease and the immunity are one document.

Step back, and the ruling is the domestic reflection of the story this publication has been tracing abroad.

Washington is currently pressuring Europe to raise its drug prices — opening a trade investigation into Germany for paying too little, rewarding Britain for agreeing to pay more. At the same time, at home, a US state trying to lower a single price has been blocked by its own federal law. The same government is deploying federal power to make foreign systems pay more, while federal law forbids its own states from making a company charge less.

The United States is exporting the price discipline it will not permit within its own borders.

Three things follow, none of them comfortable.

First, the state affordability movement has just hit its ceiling. If upper payment limits on patented drugs are preempted, the entire toolkit is confined to drugs that already have competition — which is to say, confined to near-irrelevance on the medicines that actually drive the affordability crisis. The tools the court left behind — subsidies, transparency mandates, PBM reform — are real, but not one of them touches a list price.

Second, patent strategy is pricing strategy, and Enbrel is the proof at the extreme. Its post-approval thicket is not a footnote to its price; it is the price. For anyone reading a US market, the duration and defensibility of exclusivity is the single largest determinant of pricing power — larger than any payer, any board, any negotiation.

Third, the patient is trapped between two systems that cancel each other out. The biosimilars that would cut the price are blocked until 2029. The state cap that would lower it is blocked by the same patent. There is no remaining mechanism. Enbrel will stay where it is not because anyone has decided it should, but because every route to lowering it has been closed — one by patent law, one by patent law, one by patent law.

Colorado spent four years proving what everyone already knew. The court did not disagree with a word of it. It simply ruled that the one fact everybody accepts is the one thing the state is powerless to act on. In America, it turns out, proving a drug is unaffordable and being allowed to do something about it are two entirely different powers — and a state holds only the first.

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Beyond Approval publishes weekly strategic intelligence on market access, HTA, pricing, and regulatory shifts that reshape how medicines reach patients.