Colorado Drug Review Board Finds J&J’s Stelara Unaffordable, Potential Statewide Price Cap Looms
Colorado’s Prescription Drug Affordability Review Board (PDAB) is proactively addressing high drug costs, independent of the forthcoming Inflation Reduction Act (IRA) price reductions set for 2026. Following a recent decision to impose an upper payment limit on Amgen’s Enbrel, Johnson & Johnson’s (J&J) Stelara may soon face similar measures.
PDAB’s Unanimous Vote on Stelara
On June 7, the PDAB unanimously voted that Stelara’s current pricing renders it “unaffordable” for Colorado residents. This decision sets the stage for a subsequent vote on whether to enforce an upper payment limit for the medication, potentially reducing its cost statewide.
Legal Framework and Impact
Under Colorado law, the PDAB has the authority to establish upper payment limits on all purchases and payer reimbursements for selected drugs within the state. Any savings generated through these caps must be utilized to lower costs for consumers, ensuring broader affordability.
Detailed Analysis and Findings
Prior to the vote, the PDAB released a draft summary report outlining the rationale behind their decision. This report included survey results from patients and caregivers and detailed models illustrating how Stelara’s pricing impacts access to the medication.
The board highlighted that since its approval in 2009, Stelara’s wholesale acquisition cost has surged by 198.55%, with a 26.53% increase in just the last five years. In 2022, the average price paid per patient was $150,176, culminating in a total statewide expenditure of $255 million.
Johnson & Johnson’s Response
Ahead of the PDAB meeting, J&J defended Stelara’s pricing through a letter from Michael Valenta, the company’s vice president of value, access, and pricing. Valenta urged the board to consider the drug’s affordability and to amend inaccuracies in the draft report, arguing that misleading information could distort the board’s understanding of the situation. J&J presented its analysis, claiming that out-of-pocket costs for Stelara are manageable.
Comparison with Other Drugs
Stelara is one of five drugs deemed eligible for a Colorado affordability review, narrowed down from an initial list of 604 medications. So far, only Enbrel has been subjected to upper payment limits, set to take effect six months after a 180-day rulemaking process to establish a specific cap. Amgen has since challenged this decision, filing a lawsuit to question the constitutionality of the PDAB’s process.
Conversely, the review board determined that Gilead Sciences’ HIV medication Genvoya and Vertex Pharmaceuticals’ cystic fibrosis therapy Trikafta do not qualify as unaffordable, exempting them from price caps. The next drug up for review is Novartis’ psoriasis treatment Cosentyx, scheduled for June 14.
Impending Market Changes for Stelara
Stelara’s market exclusivity ends this year, with biosimilars, including Amgen’s Wezlana, entering the market on January 1, 2025. Several other manufacturers are also preparing to launch biosimilars early next year, potentially increasing competition and driving down prices.
Additionally, J&J will face further pricing pressures in 2026 when the IRA’s negotiation process begins, likely affecting Stelara’s market dynamics.
Conclusion
The PDAB’s decision to label Stelara as unaffordable underscores Colorado’s commitment to controlling prescription drug costs. As the board considers implementing an upper payment limit, the outcome could set a precedent for future drug pricing policies, aiming to enhance affordability and access for consumers.
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Source: Fierce Pharma