Longer Patents for Increased Generic Competition: the Waxman-Hatch Act after One Decade

Grabowski, Henry G.; Vernon, John M.

doi:10.2139/ssrn.40940

Cited by 52 publications

(75 citation statements)

References 10 publications

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“…representative results from a study by Grabowski and Vernon (1996) are presented in Table 3. As this table shows, the more recent cohorts of major drugs coming off patent since 1989 have experienced greater sales losses to generics.…”

Section: Generic Substitutionmentioning

confidence: 99%

Pharmacy benefit management, cost-effectiveness analysis and drug formulary decisions

Grabowski

Mullins

1997

Social Science & Medicine

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Abstract--Pharmacy benefit management companies (PBMs) have evolved over the past decade in response to the increased demand for health care cost containment. Their activities include the implementation of drug formularies and the negotiation of rebates from manufacturers. Our analysis of this industry is based on interviews and materials provided by the top five ranked PBM companies which account for over 80% of beneficiaries covered within formulary plans. The formularies of these companies are relatively inclusive, but they are becoming more restrictive over time.

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Section: Generic Substitutionmentioning

confidence: 99%

Pharmacy benefit management, cost-effectiveness analysis and drug formulary decisions

Grabowski

Mullins

1997

Social Science & Medicine

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“…Grabowski and Vernon (1996) found that the speed at which generics captured market share was positively related to the size of the brand product's pre-entry sales, the therapeutic class of the product, and the calendar date of generic entry. Greater rates of generic utilization were observed for more recent time cohorts of brand products.…”

mentioning

confidence: 99%

Generic Competition in the US Pharmaceutical Industry

Saha

Grabowski

Birnbaum

et al. 2006

International Journal of the Economics of Business

118

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“…We represent a given R&D policy through a vector θ=(θ c ,θ s ,θ π ) affecting directly these three quantities; the parameter θ c represents a public policy lowering the marginal cost of R&D such as an R&D taxbreak, the parameter θ s a policy raising the marginal probability of research success, such as government funded NIH research that complements private R&D, and θ π a policy raising ex-post profitability of the innovation such as IP protections that raises barriers of within-patent competition by, for example raising the length or breadth of a patent. Thus the policy vector represents three different forms of policies that all stimulate R&D. The expected profits under a given fixed cost R&D investment f are given by 7 In the case of pharmaceuticals, part of the patent time is devoted to the FDA approval process. According to Grabowski and Vernon (1996), the average effective patent life for drugs (including partial patent restoration provided by the Hatch-Waxman…”

Section: Ii: Public Randd Interventions With Within-and Between-patent mentioning

confidence: 99%

“…Thus the policy vector represents three different forms of policies that all stimulate R&D. The expected profits under a given fixed cost R&D investment f are given by 7 In the case of pharmaceuticals, part of the patent time is devoted to the FDA approval process. According to Grabowski and Vernon (1996), the average effective patent life for drugs (including partial patent restoration provided by the Hatch-Waxman…”

Section: Ii: Public Randd Interventions With Within-and Between-patent mentioning

confidence: 99%

“…7 We use our estimates of the two forms of competition to assess the impact of marginal changes in patent lengths on innovative returns, such as those resulting from the Hatch-Waxman Act for US pharmaceuticals or from the international expansion of patent lives from 17 to 20 years. Although the latter represents almost an 18% increase in the patent life, it may only raise the innovative return by a couple of percent due to both discounting and between-patent competition.…”

Section: Introductionmentioning

confidence: 99%

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The Dual Effects of Intellectual Property Regulations: Within‐ and Between‐Patent Competition in the U.S. Pharmaceuticals Industry

Lichtenberg

Philipson

2002

The Journal of Law and Economics

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A patent only protects an innovator from others producing the same product, but it does not protect him from others producing better products under new patents. Therefore, one may divide up the source of competition facing an innovator into within-patent competition, which results from production of the same product, and betweenpatent competition, which results from production of products on other patents. Previous theoretical and empirical micro -based analyses have emphasized the effects of intellectual property regulations on within -patent competition by showing how protecting innovative returns from imitators raises R&D incentives. However, between-patent competition affects innovative returns, particularly through creative destruction in the many high-tech industries that seem central to overall economic progress. This suggests that a fuller understanding of IP-regulations take into account its effects on between-patent competition. We find that the total effects of intellectual property regulations depend heavily on whether these unexplored effects are present. We attempt to estimate the relative magnitudes of the two sources of competition in limiting innovative returns in the U.S. pharmaceuticals market. In this market within -patent competition from so-called generic producers has been analyzed relatively more compared to competition between-patents through so called therapeutic competition. We estimate that between-patent competition, most of which occurs while a drug is under patent, costs the innovator at least as much as within-patent competition, which cannot occur until a drug is off patent. The reduction in the present discounted value of the innovator's return from between-patent competition appears to be at least as large as the reduction from competition within -patents, and may be much larger.

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Longer Patents for Increased Generic Competition: the Waxman-Hatch Act after One Decade

Cited by 52 publications

References 10 publications

Pharmacy benefit management, cost-effectiveness analysis and drug formulary decisions

Pharmacy benefit management, cost-effectiveness analysis and drug formulary decisions

Generic Competition in the US Pharmaceutical Industry

The Dual Effects of Intellectual Property Regulations: Within‐ and Between‐Patent Competition in the U.S. Pharmaceuticals Industry

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