Each day, millions of people pick up a prescription drug from their local pharmacy or mailbox. Most are affordable, with co-pays on average less than $7 for 90% of drugs. But for a growing number of patients, and the employers, unions, or programs such as Medicare that provide their drug coverage, the cost of some life-saving brand drugs is staggering.
The brand drug lobby tells us these sky-high prices are a necessity of the remarkable innovation we enjoy in healthcare. And make no mistake, that innovation is important. But as a growing amount of research shows, for many drugs this is an illusion. The high prices are part of Big Pharma’s masterclass in patent loopholes and legal maneuvering. They are waging a war on generic drug competition and artificially keeping prices too high for too long for too many.
Fortunately, we know exactly how to fix this crisis of unaffordability. Patients don’t have to continue suffering. But we need Congress to do something about it.
DRUG PRICE RELIEF IS WITHIN REACH — BUT ONLY IF WASHINGTON MOVES NOW
The concept here is pretty simple. When there is generic drug competition, brand drugmakers have to compete on price. Employers, government programs, and the pharmacy benefit managers they hire are able to secure better deals or simply include these lower-cost generic medicines on their formularies.
This is why brand drugmakers are at war with generics. The longer they can prevent generic drug competition, the longer they can set their own prices.
Brand drugs account for 88% of overall drug spending despite only accounting for 10% of prescriptions filled. In contrast, generic drugs and biosimilars saved the healthcare system $467 billion in 2024. Within six months of launch, generics can lower costs by as much as 75%.
And we know that generics are quickly adopted when they do hit the market. Two years after launch, they dominate with up to 97% market share against brand-name counterparts.
The attack on generics is grounded in various abuses of the patent system that extend monopolies long beyond what the law intends.
One of many schemes Big Pharma deploys is the patent thicket. When a drug company invents a new drug, a 20-year monopoly can reward their innovation. Everyone agrees that innovation is critical. But brand drug companies use anticompetitive tactics to make minor changes to a drug, unrelated to any real innovation, and that allows them to extend their monopoly period, keeping competition away. Slightly altering a component, adding an already mandatory warning label, or adjusting a pill coating. These are all real examples of “evergreening,” additional patents filed by brand drug companies to protect their profits.
Patent thickets on just five drugs cost consumers $16 billion in a single year. A recent report by the Commonwealth Fund found that Novo Nordisk has filed 320 patent applications for its blockbuster GLP-1s. Researchers estimate these patents — 154 have already been approved — will provide 49 years of monopoly protection.
When generic companies do make progress and mount a legal challenge, brand drugmakers turn to a litigation tactic. Commonly known as “pay-for-delay” settlements, big-brand drugmakers sue generic manufacturers to stop more affordable drugs from entering the market. As part of the legal process, and often to avoid further costly litigation, the generic competitor agrees to postpone its market entry.
These settlements increase prescription drug spending by nearly $12 billion per year, according to a recent study. Of that, more than $3 billion per year comes directly from patients in the form of higher out-of-pocket costs.
“Product hopping” is another game Big Pharma plays. Right before a patent is set to expire, companies discontinue the original version of the medication and aggressively switch patients to a new formulation of the drug with longer monopoly protection. This subverts automatic substitution laws and undermines the ability of PBMs to promote lower-cost alternatives.
For big drugmakers, challenging a generic drug is laughably inexpensive. Filing a new patent, or hundreds of them, is far too simple. And litigation costs for generic drugmakers often exceed their expected profits on the lower-cost medicine.
RFK JR. CUTS RED TAPE ON BIOSIMILAR DRUGS TO LOWER PRESCRIPTION COSTS
Congress has an opportunity and a responsibility to address these practices and restore competition. Lawmakers can reduce the monopoly period for biologic drugs and allow biosimilar substitution. They can stop drugmakers from using anticompetitive practices such as patent thickets. This is not shortchanging innovation — it’s enforcing the intent of the original laws designed to reward it.
Patents should be a shield to protect innovation, not an impenetrable, everlasting wall to protect profits. Let’s reform a system that forces people to sacrifice their health and financial security to grow brand drugmaker profits. End the war on generics.
David Marin is the president and CEO of the Pharmaceutical Care Management Association.