In a March 28 decision, the federal district court in Colorado dismissed a suit filed by Amgen challenging the legality of Colorado Prescription Drug Affordability Board (PDAB) efforts to set upper payment limits (UPLs) on drugs that the board deems unaffordable. One of Amgen's drugs—Enbrel—is set to be the first of three drugs upon which the PDAB will impose a UPL, although the PDAB has not yet done so. In its suit, Amgen alleged, among other legal defects, that the UPL process was preempted by federal patent law.
The district court dismissed the lawsuit because it ruled that Amgen did not have standing to sue. The court concluded that Amgen lacked standing because it was not directly regulated by the PDAB law it was challenging and could not show that it faced a concrete and imminent future injury from the law as an unregulated party. The court held that the UPL would not directly regulate the wholesale prices that manufacturers charge since it is intended to apply to "downstream transactions" in the pharmaceutical supply chain. Further, the court held that future hypothetical injury to Amgen (i.e. the necessity of Amgen reducing its wholesale prices if a UPL were established for Colorado purchases) was too speculative to be a basis for Amgen's standing to sue at this point, since the PDAB has not yet established a UPL and thus it is not yet clear whether the UPL will be lower than Amgen's current wholesale price and if Amgen would be required to absorb the price reduction (or whether wholesalers or other supply chain entities would absorb the cut). This holding, along with the court's decision to dismiss the suit "without prejudice," appears to preserve the possibility that Amgen could refile its lawsuit after a UPL is established, which is expected to occur later this year.
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