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The Future of Medicare: 15 Proposals You Should Know About

Pros and cons of options on the table in Washington

13. Allow Faster Market Access to Generic Versions of Biologic Drugs

Expensive biologic drugs (medications made from living organisms) are used to treat conditions like cancer, rheumatoid arthritis and multiple sclerosis. These types of drugs currently provide manufacturers with 12 years of exclusive market access before generic versions (known as biosimilars) can enter the market. This proposal would reduce the exclusivity period to seven years. Because generic medications have a lower retail cost, this would save money for Medicare and its beneficiaries.

PRO: Under the new health care law, brand-name biologic drug manufacturers are allowed to sell their products without any competition for 12 years. This period is excessive and should be shortened in order to encourage lower prices and maximize savings for consumers and Medicare. Allowing seven years of market exclusivity is more than enough time to give manufacturers a monopoly to recoup their development costs. (Avalere Health)

CON: Drug companies have raised concerns that reducing the market exclusivity period could slow the development of new biologic drugs because it will reduce the number of years that the manufacturer is able to make money from the product to recover its research and development costs. If drug companies believe they won't be able to recoup their costs, it may reduce their incentive to develop biologics that could be used to treat many of the diseases faced by Medicare enrollees. (Avalere Health)

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