$25.5 billion saved by US health system through patent settlements

According to a new analysis, the US health system has saved $25.5 billion from 2005–2012 through patent settlements of generic pharmaceuticals launched prior to patent expiration.

In addition, the research by IMS Institute for Healthcare Informatics, conducted for the Generic Pharmaceutical Association (GPhA), showed that generic medicines were brought to market on average 81 months sooner than patent expiry.

If the current level of savings continues through to patent expiry for each molecule analyzed, an additional estimated $61.7 billion will be saved, equating to more than $87 billion in savings from settlements.

"For years, opponents of pharmaceutical patent settlements with consideration have stated that settlements create a cost for consumers, the government and others. This new analysis provides the most current, complete and transparent estimate of the impact of patent settlements on health costs, and it shows that the opposite is true. In particular, the new analysis estimates that patent settlements – including those with consideration – have led to billions in savings. For example, the settlement involving Lipitor alone will save $22 billion over the next four years. This is critical for lawmakers to understand, because any further restrictions on settlements will put these savings at risk."

Ralph G. Neas, President and CEO of the Generic Pharmaceutical Association.

The analysis also found that The Federal government benefits from almost one-third ($8.3 billion) of these savings.