When a drug’s patent runs out, prices don’t just dip-they collapse. For patients paying hundreds a month for a brand-name medication, that moment can mean switching from a $850 prescription to a $10 generic. It’s not magic. It’s economics. And it happens every single day across the U.S. and around the world.
Why patents matter-and why they expire
Pharmaceutical companies spend years and billions developing new drugs. To recoup that investment, they get a 20-year patent on the active ingredient. During that time, they’re the only ones allowed to sell it. No competition. No price pressure. That’s how drugs like Eliquis, Humira, and Ozempic could cost over $1,000 a month. But patents don’t last forever. Once they expire, other companies can legally make and sell the same drug under its generic name. That’s when the real change begins.The first generic hits-and prices start falling
The moment the first generic version hits the market, prices begin to drop. On average, the first generic reduces the brand-name price by 15% to 20%. That’s not nothing, but it’s not the full story. Take Eliquis (apixaban), a blood thinner. When its patent expired in 2020, the first generic came in at about 30% cheaper than the brand. But within a year, five more companies launched their versions. By year two, the price had fallen to under $20 a month. Today, you can find it for as little as $10 at some pharmacies. That’s an 98% drop from the original price. This pattern repeats across hundreds of drugs. The more generic competitors enter, the harder they drive prices down. A 2023 study in JAMA Health Forum found that in the U.S., drug prices fell 82% over eight years after patent expiration. That’s not a guess. That’s data from 505 drugs across eight countries.Why the U.S. sees the biggest drops
Not all countries see the same price drops. In Switzerland, prices fell just 18% over eight years. In the U.S., they fell 82%. Why? It’s simple: market structure. The U.S. has no centralized drug pricing. Insurance companies, pharmacies, and pharmacy benefit managers (PBMs) compete to offer the lowest prices. Generics become a bargaining chip. The more companies making the same drug, the more they undercut each other. In Europe, governments set price limits. In Japan, prices are negotiated nationally. Those systems slow down the drop. In the U.S., it’s a free-for-all-and that’s why patients see the steepest declines.But not all drugs follow the same rules
Small molecule drugs-like pills for high blood pressure, cholesterol, or diabetes-follow this pattern closely. But biologics? They’re different. Biologics are complex drugs made from living cells. Think Humira, Enbrel, or Ozempic. They can’t be copied exactly. Instead, companies make “biosimilars,” which are highly similar but not identical. Getting approval takes longer. And the patents? They’re trickier. AbbVie, the maker of Humira, filed over 130 secondary patents on minor changes-delivery devices, dosing schedules, packaging. These didn’t extend the original patent. But they delayed biosimilar entry for years. Even after the main patent expired in 2016, Humira kept its high price until 2023, when Amgen’s Amjevita finally launched. And even then, prices didn’t immediately crash. Why? Rebates. Insurance companies and PBMs got deals from AbbVie to keep Humira on their preferred lists. So patients still paid high prices-even when cheaper biosimilars were available.
Patent thickets: The hidden delay tactic
This isn’t an accident. It’s strategy. The I-MAK 2025 report found that the average blockbuster drug accumulates 10 to 15 secondary patents. These aren’t new drugs. They’re tweaks. A different salt form. A new tablet coating. A slightly different dose. But each one can block generics for another year or two. For semaglutide (Ozempic, Wegovy), the base patent expires in 2026. But the company has filed 142 patents covering formulations, delivery methods, and uses. Experts estimate those patents could delay real competition until 2036. This is called a “patent thicket.” And it’s why some drugs stay expensive for a decade after their patent should’ve expired.Who benefits-and who gets left behind
Patients win when generics arrive. A 2023 Kaiser Family Foundation survey found 68% of insured adults saw lower out-of-pocket costs after generics hit the market. For someone on a fixed income, that’s life-changing. But not everyone feels it right away. Some patients still pay high prices because:- Their insurance won’t cover the generic yet.
- Their doctor didn’t switch the prescription.
- The pharmacy didn’t substitute it automatically.
- They’re on a plan with high copays that don’t change based on drug cost.
How long does it take for prices to drop?
There’s no single timeline. But here’s what usually happens:- Month 0-6: First generic enters. Price drops 15-30%.
- Month 6-18: Second to fifth generics enter. Price drops 50-70%.
- Year 2-4: Ten or more generics on the market. Price drops 80-90%.
- Year 5+: Price stabilizes at 5-10% of original cost.
The big picture: Billions saved, but not fast enough
The Congressional Budget Office estimates that generic and biosimilar competition will save the U.S. healthcare system $1.7 trillion over the next decade. That’s money that goes to patients, insurers, and taxpayers. But here’s the catch: patent thickets delay 4.2 years of those savings per drug, on average. That means patients pay higher prices longer than they should. Regulators are starting to push back. The FDA approved 870 generic drugs in 2023-up 12% from 2022. The U.S. Patent Office is cracking down on weak secondary patents. The European Union is limiting how long companies can extend protection with “supplementary certificates.” But until the rules change, the system will keep favoring profit over price.What you can do when a patent expires
If you’re on a brand-name drug that’s about to go generic:- Ask your doctor: “Is there a generic version coming?”
- Call your pharmacy: “When will the generic be available?”
- Check GoodRx or SingleCare: These apps show real-time prices for generics.
- Ask your insurer: “Will the generic be covered at a lower tier?”
- Don’t assume your prescription will switch automatically. You may need to request it.
What’s next?
The next wave of patent expirations includes drugs worth over $220 billion in annual sales between 2020 and 2025. That’s a massive shift in the market. More generics. Lower prices. More competition. But the pharmaceutical industry won’t go quietly. They’ll keep filing patents. They’ll keep negotiating rebates. They’ll keep lobbying to delay competition. The good news? The data is clear. When patents expire, prices drop. And patients win. The challenge? Making sure those savings reach people as soon as possible-before the next patent thicket blocks the way.Do drug prices always drop after a patent expires?
Yes, but not always right away. Prices usually start falling within months of the first generic entering the market. The bigger the number of generic manufacturers, the faster and deeper the drop. However, in cases where originator companies use patent thickets, rebate deals, or delay biosimilar approvals, price drops can be held back for years-even after the patent expires.
Why are some generics still expensive after patent expiration?
It’s often because of how insurance and pharmacy benefit managers (PBMs) work. Even when generics are available, insurers may keep the brand drug on their preferred list because the manufacturer pays them large rebates. Patients then pay the same high price, even if a cheaper generic exists. This is especially common with biologics like Humira and Ozempic.
How long does it take for a generic to become available after a patent expires?
For simple pills, generics often launch within 3 to 6 months after patent expiration. For complex drugs like injectables or biosimilars, it can take 1 to 4 years due to longer approval times and legal challenges. In the U.S., the average time for generic entry is about 30 months after patent expiry, while in Europe, it’s typically 12 to 18 months.
Can I ask my pharmacist to switch me to a generic?
Yes, in 49 U.S. states, pharmacists can substitute a generic for a brand-name drug unless the doctor specifically writes “dispense as written.” Even if your prescription doesn’t say that, you can ask the pharmacist if a generic is available and if they can switch it. You might save hundreds a month.
What’s the difference between a generic and a biosimilar?
Generics are exact copies of small-molecule drugs, like pills for blood pressure or cholesterol. Biosimilars are highly similar versions of complex biologic drugs, like Humira or insulin. They can’t be identical because biologics are made from living cells. Biosimilars take longer to approve and are often more expensive than traditional generics, but they still cut prices significantly over time.
Are there any drugs that never get cheaper after patent expiration?
Technically, no-competition always brings prices down eventually. But some drugs, especially biologics with heavy patent thickets, may stay expensive for over a decade after patent expiration. Without regulatory action, companies can use legal and financial tactics to delay competition. That’s why drugs like Ozempic may still cost $1,000 a month even after 2026, unless new generics break through.
