Office of Saving People Money on Health Care, HCPF Release New Report on Reducing Prescription Drug Costs in Colorado

Thursday, December 12, 2019

DENVER – Today, the Department of Health Care Policy & Financing released a comprehensive report outlining the primary drivers of prescription drug costs in Colorado. Prescription drug costs are the fastest-growing consumer health care expense. The burden of high prescription drug costs is such that people are foregoing their medications because they can’t afford them. Left uninterrupted, the prescription drug cost trends will continue on an unsustainable, upward trajectory.

“We know that Coloradans are paying far too much for prescription drugs,” said Lieutenant Governor Dianne Primavera. “Since day one, this administration has been focused on lowering health care costs for all Coloradans. This report outlines the key drivers of prescription drug costs and how we can begin to tackle them. The system is clearly broken when drug companies are making record profits while hardworking people are foregoing their prescriptions because they can’t afford them.”

The report provides insight on key primary cost drivers:

  • Lack of transparency and pricing practices – ranging from pricing methodologies that are unrelated to research, development, manufacturing and distribution costs to variation in pricing between dispensing settings.

  • Anticompetitive practices – such as patent policies and other practices that delay access to less expensive generic drugs.

  • Marketing and lobbying – this includes, but is not limited to, direct-to-consumer and direct-to-physician marketing which increases both pricing and results in increased utilization of higher cost drugs.

“Pharmaceutical costs are higher in the United States than any other country. We look forward to collaborating with consumers, employers, providers of care, carriers and the industry to reduce these unsustainable costs by driving more effective state and federal policy,” said Kim Bimestefer executive director for the Department. “This report reviews policies other states have enacted, pricing and transparency opportunities, other best practices that will benefit Coloradans and our employers, and innovations unique to Colorado that can lead the nation in prescription drug cost control and health improvement technology.”

Branded and specialty drug costs are growing significantly faster than inflation rates. Spending continues to shift from traditional to specialty medicines, which now account for $384 of the $895 per person per year spent on medicines (nationally). From 2012–2018, Health First Colorado’s (Colorado’s Medicaid program) prescription drug benefit costs rose 51 percent (before manufacturer rebates) – an average of 8.5 percent each year. While generic drug spending decreased slightly, brand name drugs increased approximately 5-percent per year, specialty drugs rose an average of 28.5 percent per year over that six year period. This specialty drug trend drove three-quarters of the 51-percent cost trend (before rebates). This aligns with CMS’s prediction that over the next decade, spending for prescription drugs will represent the fastest growth health category and will consistently outpace that of other health spending.

“Recent reports show an increasing number of Coloradans and Americans say addressing health care costs is their highest priority,” Bimestefer said. “Given that prescription drugs are often the first line of offense and defense against illness, chronic disease and injury, our ability to lower costs is critical to the overall affordability of health care.”

HCPF will be hosting upcoming stakeholder events to invite active participation which will help inform more effective prescription drug affordability policy and best practices to the benefit of all Coloradans.

Read the full report here.

About the Colorado Department of Health Care Policy & Financing: The Department administers Health First Colorado (Colorado’s Medicaid Program), Child Health Plan Plus and other programs for Coloradans who qualify. For more information about the Department, please visit