Bipartisan legislation targeting drug patent abuses could reduce mandatory Medicare spending by $1.5 billion over 10 years while clearing the path for cheaper generic medications, according to a policy analysis published by the Niskanen Center. The report examines congressional momentum behind the Eliminating Thickets to Increase Competition (ETHIC) Act in the House and the Medication Affordability and Patent Integrity Act in the Senate, both designed to crack down on "patent thickets" that brand-name drugmakers use to keep lower-cost competitors out of the market. Nearly 60 percent of Americans report feeling worried about affording their prescriptions, and just over four in 10 adults don't take their medication as prescribed due to cost concerns, according to a 2026 survey cited in the report.

The report details substantial cost savings from generic competition across multiple studies. Brand-name drug prices dropped up to 80 percent in Medicare Part D markets with 10 or more generic competitors, according to a 2025 U.S. Department of Health and Human Services report. Biosimilar competition for eight Medicare Part B-covered drugs resulted in a 62 percent reduction in program spending and out-of-pocket costs. A 2025 study in the American Journal of Managed Care found that ending extended market exclusivity for four top-selling drugs over two years would have saved $1.6 billion in Medicare Part D payments alone. The Congressional Budget Office estimated the $1.5 billion 10-year savings for a 2023 Senate bill that covered only biologics, while the current House ETHIC Act covers both biologics and small-molecule drugs, suggesting its fiscal impact could be larger.

The report finds that patent gaming strategies have proliferated dramatically over the past two decades. One JAMA study showed that the ratio of continuation patents per new brand-name drug approval increased by 200 percent between 2000 and 2015, while original patents increased by only 15 percent. According to the analysis, biologics with litigated patents were protected by a median of 14 patents between 2009 and 2023, delaying biosimilar competition until 20.3 years after FDA approval, while small-molecule drugs were protected by a median of three patents, with generic competition arriving 12.6 years after approval. The report cites Humira as a stark example: its patents expired in 2016, yet biosimilars weren't introduced until 2023, forcing patients paying out of pocket to spend an estimated $70,000 a year while Tennessee spent $48 million in 2022 to cover just 775 patients on the state's employee health insurance program.

The report explains that brand manufacturers create patent thickets through "evergreening" by layering multiple secondary patents that make only minor changes to existing drugs, such as new formulations or methods of use, without providing significant clinical benefits. These continuation patents come with terminal disclaimers requiring they expire at the same time as the original patent, but evidence shows the number of patents with terminal disclaimers involved in litigation spikes just as FDA market exclusivity is about to end. The ETHIC Act would limit brand manufacturers to one lawsuit per patent group, reducing Humira's 105 litigation-eligible patents to just 24 and clearing the path for faster generic entry. The report concludes that Congress should continue focusing on policies that lower prices by fostering competitive pharmaceutical markets, as bipartisan support for targeted reforms grows.