Proposed Federal Budget Cuts May Result in Cheaper Prescription Drugs for Consumers

The Obama administration proposed budget cuts on Monday, February 14, 2011 that, if implemented, would take a step towards minimizing the power of brand name drug manufacturers, would save the government billions in healthcare spending and could provide lower costs on prescriptions drugs for consumers.

The two newly introduced 2012 budget proposals include reducing the number of years drug manufacturers will hold exclusive brand-name patents on biological drugs, from the current 12 years down to 7 years.  The Obama administration said that the 12 years of patent protection for brand name drug manufacturers harms consumers by preventing them access to much needed drugs.  This proposed measure would save the US government nearly 2.3 billion from 2012 to 2021.[2]

The second budget proposal would give the Federal Trade Commission power to block ‘pay-for-delay’ deals which currently allow brand name drug manufacturers to payoff generic drug manufacturers in the form of patent challenge litigation settlements.  ‘Pay-for-delay’ deals were initially designed to encourage generic drug companies to challenge patents on brand named drugs and introduce lower-cost generic medications into the market before brand name patents expire.  It is usually more lucrative for generic drug manufacturers to accept challenge settlements than to challenge brand name patents in court.  The FTC found in 2009 that ‘pay-for-delay’ deals end up costing consumers $3.5 billion a year and $1.2 billion of that is paid by the government.  The ‘pay-for-delay’ measure would save the US government $540 million starting in 2012 and nearly 8.8 billion throughout 2021.

The two proposals would provide consumers with lower-cost generic drugs and save the US government $11 billion over 10 years. High prescription drug costs prevent many people in the US from receiving the care they need.  RxCut^® Plus, powered by Free For All, Inc. ^®, has already taken action to help, our members are saving NOW.

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