How America's Rigged Healthcare System Keeps Your Drug Prices Sky-High

Imagine paying $96,000 a year for a medication that costs just $10,000 in Canada.

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America faces a healthcare paradox: we have access to some of the world's most advanced medicines, yet patients pay exponentially more for them than their counterparts in other developed nations. Nowhere is this contradiction more evident than in the market for biologics—complex medications used to treat serious conditions like rheumatoid arthritis, cancer, and autoimmune disorders—and their lower-cost alternatives, biosimilars.

A recent House Ways and Means Health Subcommittee hearing laid bare an uncomfortable truth: our prescription drug system is unnecessarily complex by design, with powerful forces actively working to maintain artificially high prices. The hearing revealed how a labyrinth of middlemen, rebate schemes, patent manipulations, and distorted financial incentives conspire to keep medications unaffordable for millions of Americans, even when lower-cost alternatives exist.

The 31-Year Monopoly: How Amgen Keeps Arthritis Medicine Expensive

Consider Enbrel (etanercept), a biologic used to treat rheumatoid arthritis and other inflammatory conditions. Originally approved by the FDA in 1998, Enbrel should have faced biosimilar competition years ago. However, through an aggressive patent strategy, manufacturer Amgen has extended its monopoly to nearly 31 years—until 2029—preventing Americans from accessing lower-cost alternatives available in other countries.

Amgen did this through what industry experts call a "patent thicket"—a dense web of overlapping patents covering various aspects of the drug beyond its original composition. Rather than relying solely on its primary patent, the company filed numerous additional patents covering manufacturing processes, formulations, methods of use, and administration devices.

Perhaps most striking is Amgen's aggressive post-approval patent filing strategy. The company filed 72% of its 57 total U.S. patent applications for Enbrel after the drug was already on the market—a much more aggressive approach than what occurred in Europe or Japan. When biosimilar manufacturers like Sandoz and Samsung Bioepis challenged these patents, Amgen vigorously defended them in court. The U.S. Supreme Court ultimately declined to review lower court decisions that upheld Amgen's patents.

The price consequences for patients are severe. While patients in Canada and Europe benefit from biosimilar versions priced 25-40% lower than the original drug, Americans continue paying approximately $96,000 annually for the same medication.

This table illustrates the stark disparity:

All prices in U.S. dollars for comparison; actual costs may vary by exchange rates and local negotiations.

This isn't simply market economics at work—it's the result of deliberate strategies designed to thwart competition and maximize profits at patients' expense. The byzantine complexity of our healthcare system serves as camouflage, obscuring how pharmacy benefit managers (PBMs), insurers, manufacturers, and other stakeholders extract value while patients struggle to afford life-saving treatments.

This exclusivity-driven price disparity was the backdrop for a recent House Ways and Means Health Subcommittee hearing that explored broader challenges in the biosimilar market. As the hearing testimony revealed, addressing this crisis requires confronting the fundamental problems of America's prescription drug market: an unnecessarily convoluted supply chain and powerful interests determined to keep prices at levels unheard of in the rest of the developed world.

Follow the Money: Congress Investigates Why Patients Cannot Access Cheaper Drugs

On April 8, 2025, the House Ways and Means Health Subcommittee held a hearing titled "Lowering Costs for Patients: The Health of the Biosimilar Market" to investigate how to increase access to these lower-cost alternatives to biologic medications. This one was pretty complicated and could be a snooze. However, I encourage everyone to watch to see why sick people go bankrupt to pay for life-sustaining and saving medicine. Even worse, why some choose to go without.

Subcommittee Chairman Vern Buchanan (R-FL) opened by highlighting the potential of biosimilars to reduce healthcare costs, noting they had already saved $23.6 billion since their introduction in 2015 and reduced Medicare Part B spending by $4.5 billion in 2020 alone. "Biosimilars launched at prices up to 35% lower than branded drugs, and they can drive further savings when they compete with drugs already on the marketplace," Buchanan stated.

Ranking Member Lloyd Doggett (D-TX) focused on recent cuts to scientific research funding, arguing that "few industries are so zealous in doing all they can to prevent competition" as the pharmaceutical industry. He criticized the Trump administration's cuts to the FDA and NIH, which he said threatened the research foundation that enables drug development.

Four expert witnesses provided testimony, revealing several critical barriers to biosimilar adoption despite their proven safety and cost-saving potential:

1. The Middlemen Making Billions From Your Medicine

Central to the problems identified in the hearing are Pharmacy Benefit Managers (PBMs)—third-party companies that manage prescription drug benefits for health insurers, employers, and government programs. What began as administrative intermediaries has evolved into market-dominating forces, with three companies—CVS Caremark, Express Scripts, and Optum Rx—controlling approximately 80% of the market and managing drug benefits for about 270 million Americans.

PBMs wield extraordinary influence through their core functions: negotiating drug prices, determining which medications are covered by insurance (formulary management), creating pharmacy networks, processing claims, and implementing utilization controls like prior authorization. They generate revenue through administrative fees, manufacturer rebates, "spread pricing" (charging insurers more than they reimburse pharmacies), and steering patients to pharmacies they own.

Far from creating efficiency, this system has evolved to extract maximum profit from the prescription drug supply chain while contributing to higher prices and reduced access—particularly for biosimilars.

Dr. Debra Patt, a breast cancer specialist from Texas Oncology and President of the Community Oncology Alliance, testified that despite using biosimilars daily in her practice to improve patient affordability, physicians face constant obstacles.

"PBMs and their related insurers often force physicians not to use the most effective and affordable drugs for our patients, but the most profitable drugs for those corporations," Dr. Patt explained. "Because they are allowed to use safe harbor rebates to force concessions from pharmaceutical manufacturers, these profit-seeking corporations can mandate the use of the more expensive originator biologic or a specific biosimilar most profitable to them."

She noted that these practices create logistical nightmares for medical practices, which must stock multiple different biosimilars to satisfy the preferences of different PBMs. Even more troubling, Dr. Patt revealed that "these corporate entities have now started sourcing their own 'private label' biosimilars to even further increase their profitability."

2. The Absurd Math: Doctors Lose Money When Prescribing Cheaper Drugs

Dr. Colin Edgerton, a rheumatologist from South Carolina and former U.S. Army physician, highlighted the "underwater" reimbursement problem where Medicare's payment methodology often leads to physicians receiving less in reimbursement than what they pay to acquire biosimilars.

"The gap between the cost of acquiring biosimilar treatments for administration to patients, and the amount we are reimbursed upon administering those treatments is negatively impacting both physician practices and access to care for millions of patients," Dr. Edgerton testified.

He explained that when PBMs negotiate substantial rebates with manufacturers, these rebates are factored into Medicare's Average Sales Price (ASP) calculation, artificially lowering reimbursement rates without reducing the actual acquisition costs that providers pay. This creates a perverse situation where physicians lose money when prescribing lower-cost biosimilars.

3. The Alarming Future: Nine Out of Ten Biologics Won't Have Lower-Cost Alternatives

Craig Burton, Executive Director of the Biosimilars Council, presented alarming data showing that—despite the $36 billion in savings biosimilars have already generated— their future is uncertain. An IQVIA Institute report revealed that of 118 biologics losing patent protection in the next decade (representing a $234 billion market), only 12 currently have biosimilars in development.

"This means that nine of 10 brand biologic drugs that will lose patent protection over the next 10 years do not have biosimilar competitors in development today," Burton warned. "This means fewer savings for Medicare, taxpayers, and employers."

Burton identified several barriers hampering biosimilar development, including patent thickets similar to those surrounding Enbrel, PBM rebate practices favoring higher-priced products, Medicare reimbursement challenges, and uncertainty created by recent drug pricing legislation.

4. Taxpayer-Funded Research Under Threat: The Engine of Innovation at Risk

Dr. Aaron Kesselheim from Harvard Medical School emphasized the critical role of NIH funding in enabling pharmaceutical innovation, noting that nearly all FDA-approved drugs from 2010-2019 benefited from government-funded research.

"This is a crisis of immense proportions," Dr. Kesselheim warned regarding research funding cuts, "because it is universally recognized—at least it seems outside the Trump administration—that government-funded research is the engine of therapeutic innovation."

Washington Agrees on the Problem, Not the Cause

While committee members from both parties expressed support for increasing biosimilar competition, they differed on priorities.

Republicans focused on market-based solutions, with Representatives Adrian Smith, Mike Kelly, and Greg Murphy expressing concern about the potential impact of the Inflation Reduction Act (IRA) on biosimilar development incentives. Rep. Kevin Hern noted that "Medicare reimbursement models are hurting utilization of biosimilars, something we as Congress should examine and address."

Democrats prioritized defending the Medicare drug price negotiation provisions in the IRA and expressed alarm about cuts to scientific research. Representative Mike Thompson submitted evidence of FDA staffing cuts and proposed tariffs on pharmaceuticals, while Representative Judy Chu shared how NIH funding cuts had terminated research on prescription opioids' effects on critically ill infants at institutions in her district.

Returning to our Enbrel example, however, there is good news for Enbrel users on Medicare. The 2022 IRA included Enbrel as one of the ten Part D drugs for negotiating price. In 2026, the final 2026 price for Enbrel is $2,355 per 30-day supply, a 67% discount from its 2023 list price of $7,106. Just 47,000 Medicare Part D enrollees used Enbrel in 2022. Unfortunately, this group represents less than 1% of all 53 million Part D enrollees.

Solutions in Sight: Areas of Agreement Amid Partisan Divide

Despite differing perspectives on the IRA's impact, witnesses found substantial common ground on needed reforms:

1. Reform pharmacy benefit manager practices that favor higher-priced drugs through rebates.

2. Address Medicare reimbursement challenges by increasing payment rates for biosimilars or removing rebates from the Average Sales Price (ASP) calculations.

3. Streamline FDA approval processes for biosimilars while maintaining safety standards.

4. Prevent patent thickets that delay biosimilar competition—like those surrounding Enbrel.

5. Fix distortions in the 340B Drug Pricing Program that incentivize use of more expensive drugs.

6. Enhance provider and patient education about biosimilar benefits and safety.

The $189 Billion Question: Will Washington Act Before It's Too Late?

The hearing emphasized the urgent need for policy action. As Burton testified, "A fully competitive biosimilar market could save the U.S. an additional $189 billion over the next decade—but those savings will vanish if biosimilars remain trapped in the void."

Without addressing these market barriers, Americans like those requiring medications such as Enbrel will continue paying exponentially more than patients in other countries, even after patents expire.

As policymakers consider potential solutions, the clock is ticking on billions in potential savings for patients, Medicare, and the broader healthcare system.

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