Without any guardrails, drug prices in the U.S. for some existing medications have soared.
Last year’s Inflation Reduction Act included what on its face seems a modest proposal: The federal government would for the first time be empowered to negotiate prices Medicare pays for drugs — but only for 10 very expensive medicines beginning in 2026 . America’s pharmaceutical giants are now suing to block the federal government’s first effort at drug price regulation.
AZT, the first drug to successfully treat HIV/AIDS, was considered “the most expensive drug in history” in the late 1980s, with an $8,000-a-year cost. Now, scores of drugs, many with much less benefit, cost more than $50,000 a year. Ten drugs, mostly used to treat rare diseases, cost over $700,000 annually.
Exhibit A is Humira, the best-selling drug in history, earning AbbVie $200 billion over two decades. Used in the treatment of various autoimmune diseases, its core patent — the one on the biologic itself — expired in 2016. But for business purposes, the “controlling patent,” the last to expire, is far more important since it allows an ongoing monopoly.
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