PSM Testimony: Colorado Prescription Drug Affordability Board Meeting, June 7, 2024

Today, PSM submitted the attached testimony for the Colorado Prescription Drug Affordability Board meeting on June 7, 2024. Following the presentation of an "affordability report" on the medicine Stelara, it's affordability will be debated. The PDAB could decide to vote and declare the medicine "unaffordable" which would enable the setting of an Upper Payment Limit on the medicine in the state of Colorado.

As we describe in our testimony, there are significant risks to declaring Stelara unaffordable. While we'll allow others to talk about the challenge of what is and isn't affordable and the subjectivity of that term, our testimony focuses primarily on the impact that Upper Payment Limits might have on the safety of the supply chain, the emerging black market in medicines, patient access, and survivability of pharmacies in such a system.

To quote our testimony:

We are particularly concerned about four scenarios relevant to the Colorado PDAB’s consideration of Stelara:

  1. Pharmacies that currently break even or better on Stelara might find that the PBMs they dispense for lower their reimbursements to make up for profits they lose as a result of the UPL. Dispensing Stelara will go from being profitable to unprofitable, and criminals will aim to sell diverted/fake versions to these pharmacies.
  2. Pharmacies that are currently losing money due to PBM under-reimbursements will face even greater financial pressure, and will become even more attractive targets for criminals selling black market versions of Stelara.
  3. Since World War II, price controls have repeatedly been associated with the creation of black markets, and black markets for medicine are particularly dangerous. Should Colorado put UPLs on Stelara, several types of actors will be incentivized to arbitrage medicine out of the state of Colorado, which will harm Colorado patients. Colorado is unprepared to deal with this danger: there is currently no law enforcement authority in the state adequately resourced to prosecute significant diversion of therapeutic, non-controlled-substance medicine.
  4. Setting UPLs is likely to reduce supply, as many wholesalers won’t be able to afford to sell UPL-regulated medicines in Colorado. In situations where medicines are in short supply, patients will order risky drugs from outside the legitimate supply chain. Ordering medicines from overseas will increase the risk of diverted and counterfeit medicine.

Read our testimony in full [pdf]