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A hotly contested provision of a federal law designed to speed copycat drugs to market and foster competition saved Medicare $1.5 billion from 2015 to 2020 — or nearly 5% of the $30.2 billion spent by the health care program — on just five 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. The maneuver has been a mainstay among generic companies and one way Congress attempted to boost competition. And the latest research, published Monday in JAMA Internal Medicine, suggests it has had a desired effect.

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