Generic competition and market exclusivity periods in pharmaceuticals

Abstract

In this paper we examine generic competition and market exclusivity periods for pharmaceuticals experiencing their initial generic entry between 1995 and 2005. We find that generic competition has increased over several dimensions. First, an increasing number of drugs are subject to generic entry, including drugs with relatively modest annual average sales. Second, drugs with larger sales attract more generic entrants and have shorter market exclusivity periods than smaller selling drugs. Third, blockbuster drugs with annual sales in excess of $1 billion have experienced significant decreases in their market exclusivity periods in recent years. We also find that Hatch-Waxman Act patent challenges have negatively affected market exclusivity periods over the 1995 to 2005 period.

Updated trends in US brand-name and generic drug competition

“…Our findings extend and expand upon closely-related research originally conducted by Grabowski and Kyle 8 and updated in Grabowski et al 9 and, most recently, Grabowski UPDATED TRENDS IN US BRAND-NAME AND GENERIC DRUG COMPETITION 5 et al 10 , which evaluated data on MEPs for all new molecular entities (NMEs) experiencing initial generic entry between 1995 and September 2012. With the aim of providing a continuous data series, we further extend the prior analyses to include data on all NMEs experiencing initial generic entry through December 2014, and present results for all NMEs, and for NMEs with sales greater than $250 million (in 2008 dollars) in the year prior to generic entry.…”

Regulation and Welfare: Evidence from Paragraph IV Generic Entry in the Pharmaceutical Industry

“…While insurance firms cannot force patients to move they can entice them with lower (or no) copayments for Generic B. (Panattoni, 2011) and small market (Grabowski and Kyle, 2007) have been targeted. Recent work by Hemphill and Sampat (2010) make a first attempt to explore characteristics of patents in order to understand the likelihood of generic challenge.…”

“…6 This suggests that, if successful, these challenges can significantly decrease the effective patent life of branded products bringing generics to the market earlier than otherwise would be the case (Higgins and Graham, 2009;Grabowski and Kyle, 2007).…”

“…are not the only target (Grabowski and Kyle, 2007). Moreover, in a recent event study, Panattoni (2011), reports cumulative abnormal market losses of slightly over $1 billion when a pharmaceutical firm losses a Para-IV case in court.…”

Follow-on biologics: data exclusivity and the balance between innovation and competition

“…By contrast, the average market exclusivity periods observed for new molecular entities experiencing initial competition from generic versions in the 1996-2005 period generally fluctuated between 12.5 and 15 years on an annual basis with substantial variation across individual entities (BOX 3, Note 3). There was also a declining trend observed for the molecules with the largest commercial sales that are the principal targets of patent challenges 41 . As noted previously, the distribution of NCEs is highly skewed.…”