What really happens to drug prices when patents expire

This is Part 5 of “Behind the Counter,” an in-depth video series demystifying the complex world of patents and drug pricing.

When patents for name brand medicines expire, the price of that medicine drops significantly as generic versions enter the market. Lower prices are good news for patients seeking more affordable medications, but the change can sometimes take a while. Depending on the type of drug, the number of patents it has, and its placement on health insurance formularies, seeing a meaningful change in the list price of a drug can take anywhere from a few years to almost a decade.

The most well-known example of this process is AbbVie’s Humira, which was sheltered by dozens of patents from biosimilar competition for nearly seven years after its original patents expired. As a result, Humira was able to make billions of dollars off the biologic drug, which treats conditions such as rheumatoid arthritis and Crohn’s disease. 

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