Predatory Drug Patent Abuse Costs Medicare Billions

December 10, 2024

Predatory Drug Patent Abuse Costs Medicare Billions

CMS Should Use Drug Price Negotiations to Recoup Lost Money

WASHINGTON D.C. - Ahead of a second round of price negotiationsfor popular brand-name prescription drugs by the Centers for Medicare and Medicaid Services (CMS)under the Inflation Reduction Act, a new Public Citizen reporthighlights how manufacturers of drugs selected for the first round of negotiations abused patentsto prolong monopolies and delay price-lowering generic competition. The report outlines how CMS can use negotiations to rein in patent abuses and evergreening tactics on prescription drugs to benefit enrollees and save Medicare billions.

Evergreening tactics involve patenting minor changes to an existing invention - in this case, potentially life-saving medications - to maintain a monopoly. Examples of evergreening tactics include companies obtaining additional patents on specific dosing regimens of a drug or obvious physical variations of a drug compound to lengthen monopoly control on a drug.

Four of the 10 drugs negotiated by CMS in the first round of Medicare price negotiations would likely have faced competition before negotiated prices go into effect if manufacturers had not used evergreening tactics and patent abuses, according to the report. Now, Medicare will lose between $4.9 and $5.4 billion in savings that should have accrued from access to competing, lower-cost treatments. These lost savings are nearly as much as the total annual savings ($6 billion) Medicare is expected to accrue when negotiated prices go into effect in 2026.

Public Citizen Access to Medicines Program Researcher Jishian Ravinthiran says it's time for CMS to hold drug manufacturers accountable as it continues to negotiate prices of these treatments.

"Big Pharma patent abuse is cheating Medicare enrollees of more affordable drugs and costing taxpayers billions," said Ravinthiran. "Patent abuses enable Big Pharma companies to unfairly extend their monopolies and keep prices artificially high. As CMS negotiates the prices Medicare will pay for top-selling drugs, it should take into account the billions we've already lost due to these patenting tactics."