Congress moves to strip patents from pricey drugs, opening door to generics
S. 1818 — Prescription Drug Price Relief Act of 2025 · Filed by Bernie Sanders (I-VT) · 7 cosponsors · Introduced May 20, 2025 · Referred to committee
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What it does
This bill creates a federal process to identify brand-name drugs with 'excessive' prices—defined primarily by comparing U.S. prices to those in Canada, the UK, Germany, France, and Japan. When a drug is flagged as excessively priced, the government can strip its patent protections and grant open licenses to generic and biosimilar manufacturers, who pay a 'reasonable royalty' to the original patent holder. The bill also requires drug makers to report detailed pricing and R&D cost data annually, establishes a public database of flagged drugs, and imposes civil penalties on manufacturers who fail to report or provide false information.
Why we flagged it
The bill's core mechanism is a government-administered price-review system that can strip patent exclusivity from branded drugs deemed excessively priced and grant compulsory licenses to competitors. This is a direct intervention in pharmaceutical pricing and intellectual property, not a routine regulatory adjustment.
What the text implies
- The 'reasonable royalty' standard is set by the Secretary and may be contested, creating ongoing litigation risk and uncertainty for generic manufacturers about their actual cost of entry.
- International reference pricing (Canada, UK, Germany, France, Japan) may not reflect actual manufacturing costs or market conditions in those countries, potentially setting royalty rates below sustainable levels for innovation.
The full analysis lists 5 implications of this text.
Who stands to gain
generic drug manufacturers; biosimilar manufacturers; pharmacy benefit managers (PBMs)