THE NEW REPUBLIC – The industry’s intellectual property manipulations are stealing from your pockets—and limiting the benefits of the Biden administration’s key achievement.
It was a dose of qualified good news. Signed in 2022, Joe Biden’s Inflation Reduction Act gave the Centers for Medicare and Medicaid Services a power they’d sorely lacked since the agency’s conception: the ability to negotiate drug prices directly with the manufacturers.
The law was by no means perfect. The cost savings are only for 10, albeit very expensive, drugs, and the negotiated prices only apply to Medicare and Medicaid rather than extending to every health care insurance plan.
Despite these limitations, estimates predict that price negotiations will save the government around $6 billion every year and send a clear signal to the pharma companies that the government was going to have a stronger hand in dictating prices.
Here’s the bad news:
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The $6 billion the government is supposed to save from drug price negotiations is very close to the amount Medicare has already lost thanks to Big Pharma’s abuse of the patent system.
Earlier this month, the consumer watchdog Public Citizen released a report outlining how four of the 10 drugs subject to negotiation would have faced competition from less expensive generic brands before price negotiations went into effect were it not for tactics perpetrated by the pharmaceutical industry known as “evergreening.”
Put simply, evergreening is when a pharma company patents minor modifications on the drug as “new inventions” and then uses the new patents to extend their monopoly, freezing out competition and artificially keeping prices high.
As a result, the report estimated Medicare will lose between $4.9 and $5.4 billion in savings that should have accrued had the medications come off patent earlier …