How a pharmaceutical company made $114 billion playing with the US patent system

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Some Medicare patients have suffered from it.

Sue Lee, 80, of Crestwood, Ky., had been taking Humira for years to prevent painful sores caused by a chronic skin condition known as psoriasis. His employer’s insurance plan had helped him keep his annual payments at $60. Then she retired. According to Medicare rules, she would have to pay about $8,000 a year, which she could not afford.

I cried for a long time, she said.

For months, Ms. Lee stopped taking all medication. The sores came back with a vengeance, she said. She joined a clinical trial to temporarily gain access to another drug. Now she relies on free samples of another drug provided by her doctor. She does not know what Shell does if this reserve is exhausted.

Barb Teron, a book buyer in Brook Park, Ohio, plans to delay her retirement because she worries about the cost of Humiras. Ms. Teron, who takes Humira for Crohn’s disease and colitis, has never had to shell out more than $5 for a drug refill because her employer’s insurance plan pays for most of the tab. The cost, according to a pharmacy app on Ms Terons’ phone, was $88,766 last year.

Ms. Teron, who turns 64 in March, would have liked to retire next year, but that would have meant relying on Medicare. She fears her disbursements will skyrocket. When I look at that $88,000 charge for a year, there’s no way, Ms. Teron said.

AbbVie executives acknowledged that Medicare patients often pay significantly more than privately insured people, but said the blame lies with Medicare. In 2021, during testimony before a congressional committee investigating drug pricing, AbbVies chief executive Richard Gonzalez said the average Medicare patient had to pay $5,800 out of pocket per year. (AbbVie declined to provide updated numbers.) He said AbbVie provides the drug for virtually nothing to nearly 40% of Medicare patients.

High drug prices also impose taxes on employers.

Shortly after starting to take Humira, Melissa Andersen, an occupational therapist from Camdenton, Mo., received a call from a human resources representative at her company. The company covers its employees’ health claims directly, rather than paying premiums to an insurer. Her Humira was costing the company well over $70,000 a year more than Ms. Andersens’ salary.

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