A consumer advocacy group says a quiet, unexplained shift in Medicare policy handed AbbVie's pancreatic-enzyme drug Creon a seven-year reprieve from price negotiation, and that the Trump administration now wants to make the reprieve permanent. According to a Public Citizen investigative report covered this week by STAT's Pharmalot, the Centers for Medicare and Medicaid Services effectively excluded Creon from the current round of negotiations by treating the drug's regulatory reclassification as a biologic as if it extended the clock before Medicare could bargain over its price. More than 185,000 Medicare beneficiaries used Creon in 2024, at a gross cost of about $1.49 billion, and the report notes that the drug CMS selected for negotiation instead accounted for roughly half a billion dollars less in spending.
The dollar figures matter, but the mechanism is what makes this worth dwelling on, because it is not a simple story of a loophole exploited. It is a case of two separately sensible policies colliding at a seam and producing a result that serves the purpose of neither.
Two reasonable policies
The first policy concerns how certain old drugs are regulated. Creon belongs to a group of long-established products, including pancreatic enzymes and insulins, that Congress required the FDA to convert from their old drug approvals into biologics under a statutory transition. The reason for that conversion was pro-competition and pro-savings: reclassifying these products as biologics opened the door to developing biosimilar versions, cheaper alternatives that could bring prices down. The whole point was to invite competition to old drugs that had faced too little of it.
The second policy concerns the timeline of Medicare's negotiation program. Under the Inflation Reduction Act, a small-molecule drug becomes eligible for price negotiation seven years after FDA approval, while a biologic gets eleven. Biologics are given the longer runway on the rationale that they are costlier and slower to develop and that biosimilar competition, unlike generic competition, tends to arrive slowly and incompletely, so a longer protected period is meant to preserve the incentive to invent them. Whatever one thinks of that judgment, it is a deliberate choice aimed at protecting genuine biologic innovation.
The collision
Now put the two together. When an old, small-molecule-style drug like Creon is converted into a biologic in order to enable competition, it simultaneously slides into the category that receives the longer delay before negotiation, a delay designed to protect genuinely new and hard-to-develop biologics. So the reclassification meant to speed competition instead postpones negotiation, and the innovation-protection window intended for cutting-edge biologics is captured by a drug that has been on the market for decades and has no innovation left to protect.
Both policies are turned against their own purposes at the same moment. The conversion, whose job was to lower prices by inviting competitors, becomes a mechanism for keeping prices unnegotiated for longer. And the extended biologic delay, whose job was to reward the difficult work of developing new biologics, shelters an old product that did none of that difficult work in its new regulatory life. The seam where the two policies meet produces an outcome neither policy's authors could have wanted.
A clock that follows the label, not the drug
Underneath the collision sits a more basic design flaw, which is what the eligibility clock actually keys off. CMS treated the conversion, a purely administrative relabeling that changed nothing about the molecule, the medicine, or its long commercial history, as resetting or extending the timeline before negotiation could begin. In other words, the trigger tracks the regulatory category and the licensure date rather than the economic substance the policy is supposed to address, which is how long a drug has actually been earning revenue without competition.
That is the crux. Creon is not a new medicine by any meaningful measure; it is an old one wearing a new regulatory costume. Tying its protection from negotiation to the date it was reclassified, rather than to how long it has really been on the market shielded from competitors, lets a change of label do what a change of substance should be required to do. A clock that resets when a decades-old drug is relabeled is measuring the paperwork, not the thing the policy cares about.
The stakes, and the irony the report emphasizes
The consequences are concrete. Because Creon was passed over, Medicare negotiated a drug with substantially lower spending in its place, and the report notes that Medicare was entitled to larger mandatory discounts on Creon than on the alternative, so the delay meant declining to bargain over a bigger and more discountable target. Public Citizen's sharpest point is one of intent: Congress ordered these old drugs converted to biologics, as one of the group's researchers put it, not so that industry could evade price negotiation for longer but so that cheaper competitors could reduce costs. A tool built to bring prices down was, in effect, repurposed into a shield that keeps them up.
The other side, in fairness
It is important to keep perspective on what is contested here and who is making the argument. Public Citizen is an advocacy organization with a clear pro-negotiation stance, and its framing of the episode as a windfall and a gift is advocacy language; its findings are best read as its analysis rather than as neutral fact. AbbVie and CMS have a defensible response available. The conversion genuinely did make Creon a biologic, and the statute keys negotiation eligibility to a product's regulatory status and licensure date, so applying the biologic timeline may be a reasonable reading of how two laws interact rather than a lawless handout. It is a consequential interpretation, but interpretation is not the same as abuse.
The larger questions are contested too, and this analysis takes no side on them. Whether Medicare should negotiate drug prices at all, whether the longer delay for biologics is justified by their development economics, and how aggressively the program should reach are genuine policy disputes on which reasonable people, and the two political parties, disagree sharply. Nothing here is a verdict on those debates.
Why the structural point survives the politics
What can be said without picking a side is that the specific outcome is incoherent on its own terms, and incoherent in a way visible from every position in the drug-pricing argument. A supporter of negotiation should object because the delay forfeits savings the program was meant to capture. Someone skeptical of negotiation but supportive of the biologic conversion should object because the episode perverts that conversion's competition-promoting purpose. And anyone, regardless of view, should be uneasy with a price-protection clock that restarts when an old drug is relabeled, because that ties a valuable delay to a regulatory formality rather than to the market reality the delay is supposed to reflect. The result serves the pro-negotiation goal poorly, the innovation-protection goal not at all, since Creon needs no such protection, and the pro-competition goal of the conversion perversely, by converting a competition tool into a delay. An outcome that undercuts every stated objective at once is not an ideological problem; it is a drafting-and-implementation problem.
The lesson, in the end, is not really about AbbVie or even about drug pricing. It is about the hazard of keying a policy's benefits to a formal category, biologic versus small molecule, one licensure date versus another, rather than to the economic substance the policy exists to address, which here is simply how long a medicine has earned without competition. Category-based triggers are gameable, and they throw off strange results precisely at the seams where categories are redefined, so that a reclassification created for one purpose can, at that seam, spring a consequence designed for an entirely different one. The clean fix is not ideological: tie the negotiation clock to how long a drug has actually been on the market without competition, so that relabeling a decades-old product cannot restart its shelter from bargaining. Until eligibility follows substance instead of category, seams like this one will keep generating outcomes that nobody designed and that advance no one's stated aim, whatever they think prices ought to be.
Primary sources
- STAT's Pharmalot column, by Ed Silverman, for the report that, per a Public Citizen analysis, a little-noticed CMS policy shift caused a seven-year delay in selecting AbbVie's Creon for Medicare price negotiation, that CMS did not justify the change, and that the Trump administration has proposed making it permanent.
- Public Citizen's investigative report for the specifics that Creon was excluded from negotiation for an extra seven years via its regulatory conversion to a biologic, that more than 185,000 Medicare beneficiaries used it in 2024 at roughly $1.49 billion in gross spending, that the drug selected instead accounted for about half a billion dollars less, that Medicare was entitled to larger mandatory discounts on Creon, and for the statements of Peter Maybarduk and Sarah Karlin-Smith, including that Congress required converting such old drugs to biologics to enable cheaper alternatives, not to let industry evade negotiation longer.
- The Congressional Research Service for the Inflation Reduction Act negotiation framework, including the seven-year, small-molecule, and eleven-year, biologic, eligibility thresholds, the nine- and thirteen-year timing for negotiated prices to take effect, and the program's exclusions.
- KFF for analysis of how lengthening the small-molecule delay would exempt high-spending drugs and for the rationale behind giving biologics a longer window.
- Background on the statutory transition under which older products such as pancreatic enzymes and insulins were converted to biologic regulation to enable biosimilar competition.