DOSE OF REALITY: CONGRESS MUST REPEAL BIG PHARMA’S BLOCKBUSTER BAILOUT THAT WILL COST SENIORS AND TAXPAYERS BILLIONS OF DOLLARS IN PREVIOUSLY UNDERESTIMATED COSTS
ORPHAN Cures Act Will Enable Big Pharma to Keep Drug Prices High on Top Money Makers
Earlier this year, Congress passed a Big Pharma-supported policy as a rider in a larger legislative package without having the right information on the brand name prescription drugs that would be impacted — or the true cost to American seniors and taxpayers. Subsequent analysis has confirmed the policy would help Big Pharma keep prices high on some of their biggest blockbuster money makers, amounting to a massive bailout for brand name drug companies at the expense of billions of dollars in previously underestimated costs for the American people.
Congress did not have that information at the time the rider was passed into law. As the true impact of this pharma-backed policy comes to light, lawmakers must remedy the situation by repealing the Big Pharma bailout on blockbuster brand name drugs.
Big Pharma argued the policy, known as “The Optimizing Research Progress Hope And New (ORPHAN) Cures Act,” would help protect and foster pharmaceutical innovation for medications with small patient populations. The truth is, this misguided law will help brand name drug manufacturers keep prices high on a whole category of products and cost seniors and taxpayers far more than previously estimated.
Originally reported by The Wall Street Journal, the nonpartisan Congressional Budget Office (CBO) previously estimated this pharma-backed policy would cost seniors and taxpayers $4.8 billion in higher prescription drug spending, but “[t]he true tally of the new provisions could be far higher because CBO missed certain drugs such as Keytruda. The office plans to re-evaluate its analysis.”
The Journal noted “Keytruda, which is used to treat cancer and had $17.9 billion in U.S. sales in 2024.” The report also identified Johnson and Johnson product “Darzalex, a melanoma treatment, is estimated to have had $5.6 billion in gross Medicare spending last year… Bristol-Myers Squibb’s cancer drugs Opdivo and Yervoy, which are estimated to have cost Medicare $4.7 billion and $993 million, respectively, in 2024… [and] AbbVie’s blood-cancer pill Venclexta, is estimated to have had $814 million in gross Medicare spending in 2024,” as additional blockbuster brand name medications that would become exempt from solutions designed to lower drug prices for seniors and taxpayers under the provisions.
Multiple subsequent analyses shed further light on the breadth of blockbuster brand name drugs that may be impacted by the policy, which “will likely mean higher out-of-pocket costs for Medicare beneficiaries who use these medications.”
According to an analysis published in Health Affairs in August by Jennifer C. Chen and Anna Kaltenboeck of Verdant Research, there are at least 10 brand name drugs that could be impacted by the recently passed Big Pharma-backed provision. Their analysis includes several products not previously thought to be impacted, including Incyte’s immunomodulator and oncology drug Jakafi, Teva’s tardive dyskinesia drug Austedo and Exelixis’ cancer drug Cometriq. According to this analysis, gross Medicare spending on these drugs in 2023 amounted to $13.8 billion, and nine of the 10 drugs that could be impacted are for certain forms of cancer.
A second analysis in Health Affairs also published in August by researchers associated with The University of Washington’s School of Pharmacy, identified at least 13 brand name drugs that could be impacted by the ORPHAN Cures Act. These 13 drugs, between Medicare Part B and Medicare Part D, had projected gross spending of over $33 billion in 2024. Additional brand name drugs included in this analysis include AbbVie’s cancer drug Venclexta, Novartis’ multiple sclerosis drug Kesimpta and Pfizer’s cancer drug Adcetris.
Another analysis on the impact of the ORPHAN Cures Act from Kaiser Family Foundation (KFF) found at least 18 brand name drugs that could be impacted by the provision. These 18 drugs combined for $17.5 billion in Medicare spending in 2023.
Keytruda: A Case Study in Big Pharma’s Blockbuster Greed
Keytruda generated $8 billion in sales for its brand name manufacturer Merck in the second quarter of this year alone. This blockbuster, now projected to be impacted by ORPHAN Cures, provides a case study in Big Pharma’s egregious pricing and anti-competitive practices. Already patent-protected in the U.S. until 2028, Merck is working to further extend monopoly pricing and undermine competition from more affordable alternatives beyond 2028 by seeking a new formulation and additional patents. At the J.P. Morgan Healthcare Conference in January 2025, Merck CEO Rob Davis said the brand name drug company is “moving up plans to file for approval and launch a subcutaneous version of Keytruda by the end of 2025.”
According to research from I-MAK, Merck has filed for 129 patent applications on Keytruda – more than half of which were filed after the drug’s initial approval by the U.S. Food and Drug Administration (FDA). The Big Pharma company has been granted 53 patents on this one drug. I-MAK estimates that Americans will spend at least $137 billion on Keytruda while the drug faces no competition due to its extended exclusivity that already totals more than eight years — without reflecting the added impact of the Big Pharma giant’s new patent strategy.
