Abstract
Introduction
When faced with a paragraph IV challenge, research-based pharmaceutical
companies sometimes use "authorized generics" as a way to slow market share
losses. When making these decisions, fi rms should consider the rate of
generic erosion over the 180-day exclusivity period, payer dynamics related to
the adoption of generic products during this period, and the terms of any
deals forged with generics company partners.
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The 1984 Hatch-Waxman amendments to the Food, Drug, and Cosmetic Act encourage
early generic entry by providing an incentive of a 180-day exclusivity period
for generics companies that successfully challenge brand-name drug patents.
How successful has this strategy been for generics companies, and how have
brand-name pharmaceutical companies responded to this challenge?
The rate of generic erosion of a brand during the 180-day exclusivity period
depends on the dynamics of the generic market. What are three key scenarios
that illustrate generic erosion during the 180-day exclusivity period?
When an exclusive generic is priced lower than the brand by only a small
amount, managed care organizations save little. Factor in the loss of rebates
provided by the brand and the lower copay, and exclusive generics can actually
increase payers' expenditures. However, some payers have begun to consider
such factors when making reimbursement decisions. How can payer behavior
infl uence the rate at which erosion of brand sales occurs during the 180-day
exclusivity period?
Decision Resources, Inc. 13-2
When deciding whether to issue an authorized generic, pharmaceutical companies
should consider three possible scenarios. What are those scenarios, and how
would each affect the research pharmaceutical company' s sales?
Scope
- Pharmaceutical companies' response to paragraph IV challenges:
authorized generics.
- Authorized generics: the two sides of the debate.
- Generic erosion: the key factors that affect it.
Mentioned in This Spectrum Report
Companies/Organizations
- Barr
- Bayer
- Boehringer Ingelheim
- Bristol-Myers Squibb
- Eon Labs
- Federal Trade Commission (FTC)
- Forest
- Generic Pharmaceutical Association
- Geneva
- GlaxoSmithKline
- Greenstone
- Hexal
- Inwood
- Johnson & Johnson
- ??????????????
- Kremers Urban
- Merck
- Novartis
- Offi ce of Generic Drugs
- Organon
- Par Pharmaceutical
- Pfi zer
- Roche
- Roxane
- Sandoz
- Sanofi -Aventis
- Schering-Plough
- Schwarz Pharma AG
- Teva
- Warrick
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