New drug rule could endanger $1.3 billion of Medicare funding

The pharmaceutical industry is pushing for a patent law change that could raise federal healthcare costs by $1.3 billion over the next decade.

The Food and Drug Administration requires waiting 30 months before approval of generic versions of drugs whose patents are being challenged in federal court. Many companies use a loophole to push copies of brand-name medications rather than wait for patent disputes to be settled. The law change would prevent this process, according to a Wall Street Journal report.

That exemption for drug patents and the subsequent delay of generic drugs, which can cost as much as 90% less than their brand name counterparts, could cost federal programs an estimated $1.3 billion over 10 years, according to an analysis by the Congressional Budget Office. The CBO analysis was requested by lawmakers that included Sens. John Cornyn (R-TX) and Chuck Schumer (D-NY).