Colorado was the first state to cap a drug's price – then a federal court stepped in

Colorado is one of a handful of states with a review board for drug prices and one of only four with a board empowered to set upper limits on what state agencies, insurers and other purchasers may pay or be reimbursed for certain high-cost drugs dispensed to patients in the state.

In fall 2025, the Colorado board capped Enbrel, an immunosuppressant drug made by Amgen used to treat rheumatoid arthritis, psoriasis and other autoimmune conditions, at US$600 per weekly dose. That's about $31,200 per year, which is much less than the approximately $53,000 the average Colorado health plan paid for the drug in 2023.

The price cap was set to take effect on Jan. 1, 2027. But a lawsuit brought by Amgen could delay or block it altogether.

The cap set by the Colorado board is roughly in line with the maximum fair price the federal government negotiated for Enbrel under Medicare, which took effect in January 2026.

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The list price of Enbrel, which has been on the market since 1998, has risen by more than 1,500% since its launch. Amgen generated $2.23 billion in sales in 2025 alone.

I study how patent law and drug regulation shape access to medicine. This case sits at the center of a fight that will determine whether states can do more than document high drug prices and make policy recommendations. Its outcome could decide whether states such as Colorado can meaningfully regulate drug prices, or whether federal patent law will stand in their way.

The lawsuit

In Amgen Inc. v. Mizner, Chief Judge Daniel D. Domenico granted Amgen a preliminary injunction on July 1, 2026. The ruling barred the Colorado Prescription Drug Affordability Review Board from enforcing the upper payment limit it set for Enbrel.

A prior lawsuit in the same court, filed in 2024 after the Colorado review board selected Enbrel for review, was dismissed in March 2025 by Judge Nina Y. Wang.

The court reasoned that Amgen, as a manufacturer at the top of the supply chain, was not directly regulated by the law, which applied only to downstream transactions, and thus had no right to sue the state. Those transactions include pharmacy-to-consumer sales, payer reimbursements, and pharmacies' and providers' purchases. The court also reasoned that with no upper payment limit yet set, any injury was "too speculative to support standing." Amgen refiled the present suit once Colorado actually set its upper payment limit.

Amgen's challenge rests on the doctrine of patent preemption. Under the U.S. Constitution's supremacy clause, when a state law conflicts with a federal law, the state law is invalidated, or "preempted," by the federal law. While federal patent law does not expressly bar states from capping drug prices, Amgen argued that the cap is preempted because it interferes with patent law's core objective of allowing inventors to recoup the costs of research and development with a limited monopoly.

A patent gives its holder roughly 20 years to exclude others from making, selling and using an invention. Drugmakers argue that they need that window to earn back the hundreds of millions to billions of dollars they say it takes to bring a new medicine to market. However, researchers have disputed those figures as inflated and difficult to verify.

The preemption argument is based on the U.S. Court of Appeals for the Federal Circuit's 2007 decision in Biotechnology Industry Organization v. District of Columbia, which struck down a Washington, D.C., drug-pricing law.

In the Colorado case, Judge Domenico viewed the 2007 decision as binding, reasoning that balancing innovators' profits and consumers' access to innovation is a task exclusively for Congress, which it undertook in the Patent Act.

The court also rejected the board's argument that the cap only affects what downstream purchasers pay, writing that "it is not necessary to unravel the entire system to understand that, as a result of Colorado's cap, Amgen will receive less money from its wholesalers and will fare more poorly in negotiations with other purchasers in Colorado and elsewhere."

Why the ruling is contested

Still, the fight isn't over.

That's because patents confer a right to exclude competitors, not an affirmative right to sell, much less to recoup a particular profit. The court conceded this point, yet it treated any state-imposed reduction in Amgen's expected profits as an obstacle to Congress' purpose of balancing profits and access to innovation in the Patent Act.

Governments routinely limit what patent owners earn. For example, the U.S. Supreme Court has held that states are permitted to tax sales of or outright ban inventions that happen to be patented. In 2003, the Supreme Court upheld a Maine program designed to pressure drug manufacturers into lowering prices.

And federal courts have uniformly rejected the pharmaceutical industry's challenges to Medicare drug price negotiation.

The same logic could apply to the right-to-repair laws two dozen states have enacted, which require manufacturers such as Apple and John Deere to sell repair parts – many of them patented – at fair and reasonable prices. An overbroad reading of patent preemption would effectively gut state right-to-repair laws, enabling patentees to exert extraordinary control over downstream prices of consumer goods. And prescription drugs are no exception.

There are also differences between the two laws the court treated as equivalent. The D.C. law penalized manufacturers for "excessive" pricing of patented drugs, specifically targeting patented inventions. Colorado's criteria apply to all drugs, patented or not. Furthermore, the Colorado law gives manufacturers a voice in the review by permitting them to submit data and participate in hearings before any upper payment limit is set.

Domenico offered that Colorado may pursue affordability through "subsidization" or "using its market power to negotiate lower prices," just not "by capping the price of a patented drug."

What happens next?

A preliminary injunction is not a final ruling.

Because the injunction paused the cap before it ever took effect, the pressure on Amgen to reduce the price of Enbrel or pull it from the Colorado market is now on hold. Because the case arises under patent law, any appeal would be heard by the Federal Circuit, the same court that decided to strike down the Washington, D.C., drug-pricing law in 2007.

If the Federal Circuit does not overrule its 2007 decision or find it inapplicable to Colorado's law, the Colorado upper price limit may survive only if the Supreme Court steps in.

The stakes extend well beyond Colorado.

Although 4 in 10 American adults report being unable to afford taking their medication as prescribed, federal action hasn't filled this gap. The White House touts its "most-favored-nation" drug deals and TrumpRx.gov, but the voluntary deals mainly benefit Medicaid and cash-paying patients, leaving most insured Americans' prices, including for drugs such as Enbrel, untouched.

Medicare's negotiation program, though popular with voters across party lines, covers only 10-20 additional drugs a year and does not affect the private insurance market, meaning only Medicare recipients see those lower prices.

Other states, including Maryland, Washington and Minnesota, each of which has its own affordability review board, are developing their own payment limits and will be watching this case closely. Maryland has already agreed to cap prices for the diabetes drugs Ozempic and Jardiance. Whatever the District Court decides, the question is bound for the Federal Circuit – and its answer will set the limits of what every affordability board in the country can actually do.

This article is republished from The Conversation under a Creative Commons license. Read the original article.