The dangers and challenges of Upper Payment Limits (UPL)

Patients, providers, pharmacists and other knowledgeable stakeholders warned the State of Colorado about the challenges and dangers of an upper payment limit (UPL) since Colorado’s Prescription Drug Affordability Board (PDAB) was first discussed. Despite the warning, Colorado’s PDAB recently announced that EnbrelTM was unaffordable and imposed an upper payment limit.

The PDAB based its UPL on the Medicare Part D maximum fair price (MFP) that was placed on the product for Medicare beneficiaries. That price goes into effect in January 2027.

The MFP for Enbrel is intended for only the Medicare program. Colorado, by opting to utilize that price for the broader commercial marketplace, expanded the scope of the negotiated price. The Congress could have extended the MFP to Medicaid but clearly chose not to. Now, Colorado is ignoring the broader economics that an MFP or other state-implemented price controls can have on patient access.

Specifically, by tying the upper payment limit to MFP, the Colorado PDAB has limited the amount payers can reimburse for that product. Commercial plans have already signaled that they are far less likely to reimburse for products where a state imposes a UPL. This action by the Colorado PDAB, could lead to a loss of access to patients who rely on these drugs, does nothing to lower patient out-of-pocket costs, and will increase payer pressure for a switch to another product.

Now, due to the CO PDAB actions, RAAP is concerned that the state chose plan profitability over patient access. It is clear that the MFP only saves money for commercial health plans in Colorado. Not patients. Data shows that approximately 60% of patients only “paid a total amount between $0-$50” per month for the product. This figure is provided within the PDAB’s own report on the patient impact. The product will now be price-controlled by the state, using a price and methodology that was never intended for the commercial marketplace. It appears that the PDAB succumbed to political pressure to show they could do something, anything. Even if there is very little, if any, benefit to the patient.

Of note, earlier this year, New Hampshire repealed their PDAB because a UPL was not worth the threat to patient access and the continued state expenditures to chase illusory savings.

Perhaps the worst impact, not all patients receive the same benefit from switching to another biologic medication, even in the same class. So, a patient doing well on Enbrel may find themselves forced to use another product, not for a therapeutic benefit, but because the PDAB UPL causes the plans to restrict or drop access.

Adopting this UPL to score political points without doing any additional homework on the impact on patients is a tragic outcome. Patients in Colorado deserve better.