A controversial provision of a federal law designed to speed copycat drugs to market and foster competition saved Medicare Part D nearly $15 billion from 2015 to 2021 on just 15 medicines during that period, according to a new analysis.
The provision is known as skinny labeling, which refers to a move by a company that seeks regulatory approval to market a generic or biosimilar medicine for a specific use, but not for other patented uses for which the brand-name drug is prescribed. By doing so, the company seeks to avoid lawsuits in which the brand-name manufacturer could claim patent infringement. In short, this is a so-called carve-out.
The tactic originated with the Hatch-Waxman Act, a decades-old law designed to supply Americans with cheaper generic alternatives to pricey brand-name drugs. Skinny labeling has been a mainstay among generic companies and is one way that Congress attempted to boost competition. And the latest research, which was published in the Annals of Internal Medicine, suggests it has had a desired effect.
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