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AAM Report: Patent settlements deliver $423 billion in savings

The findings underscore these agreements' vital role in expanding patient access and driving down healthcare costs.

Photo by freestocks / Unsplash

WASHINGTON — Patent settlements between brand-name and generic or biosimilar drug manufacturers have resulted in $423 billion in healthcare savings and dramatically faster access to more affordable medicines, according to a new analysis released today by the Association for Accessible Medicines (AAM) and its Biosimilars Council.

Conducted by the IQVIA Institute for Human Data Science, the study reveals that, on average, such settlements have brought generic and biosimilar drugs to market more than five years earlier than the expiration of brand patents. The findings underscore these agreements' vital role in expanding patient access and driving down healthcare costs.

“The ability for generic and biosimilar manufacturers to procompetitively settle with brand-name drug manufacturers creates significant savings and efficiencies and brings lower-cost medicines to patients years earlier,” said John Murphy III, President and CEO of AAM. “Efforts to severely limit patent settlements will hurt patients, cost billions of dollars, and exacerbate industry sustainability concerns in the generic medicines marketplace.”

The analysis evaluated 288 drug molecules for settlement activity. Of those, 84 molecules had settlements that led to accelerated market entry by an average of 64 months. For 17% of these molecules, the entry came more than a decade before the original patent expiration.

Across the 84 early-entry molecules, generics and biosimilars reached patients 5,365 months sooner, leading to $423 billion in system-wide savings, roughly $5 billion per molecule.

The report reinforces the long-standing argument that pro-competitive patent settlements, particularly since the landmark FTC v. Actavis decision in 2013, are not only legal but beneficial to the healthcare system. AAM warns that ongoing efforts to restrict or eliminate such agreements could severely undermine both patient affordability and the viability of the generic drug industry.

For more information, visit accessiblemeds.org.

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