In the coming months, we can expect lots of conversations about prescription drug pricing—and you’ll likely hear the term “evergreening.” Here’s an explainer on what the term means—and why it relies on myths.
As background, it’s important to understand the huge investment required to develop a new drug—on average six years and $2.6 billion to research and develop a new molecule, says law professor Erika Lietzan in a recent piece for Cato Regulation.
So, what is evergreening? In simplest terms, it’s the false notion that drug manufacturers make minor changes to existing drugs to obtain new patents or regulatory exclusivity, thereby extending their market “monopoly.”
Most often, people use the term “when an innovator introduces a newer version of its own product that is already on the market,” continues Prof. Lietzan.
However: “Once the myths of ‘evergreening’ are laid bare, it becomes apparent that proponents of these proposals really want for the government to limit medical innovators to one medical product in the marketplace for each useful new molecule discovered,” she explains.
Arguments for regulatory reform that use the term “evergreening” are grounded in three myths:
Myth #1: Innovators extend their patents. “This is legally impossible,” she says.
Myth #2:Competitors are blocked.Nope. “[O]nce the initial patent and (if applicable) statutory exclusivity on the innovator’s active ingredient have expired, its competitors have substantial freedom to operate.”
Myth #3:Automatic substitution is critical. Many assume a new version of a drug “precludes uptake of less expensive medicines by interfering with automatic pharmacy substitution under state law.” The reality: “an innovator’s newer product creates a new choice for doctors and payers.”
The bottom line: patents drive innovation of both new and improved products. While we need to discuss reforms to reduce patients’ out-of-pocket costs, any that rely on the idea of “evergreening” miss the point.
