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Feb 01st
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The Impact of Authorized Generic Pharmaceuticals on the Introduction of Other Generic Pharmaceuticals

This study examines the impact of authorized generic drugs on the introduction of other generic pharmaceuticals, and therefore on the potential benefits of generic drugs for U.S. consumers. The analysis focuses on the incentives and disincentives of generic companies to challenge the patents of brand products, in order to qualify for a special, 180-day period of market exclusivity, when their generic product still faces potential competition in that period from generics authorized by the original developer.

Full 16 pages Report is available for download at Repository.

  • A review of the literature and new analysis conducted for this study establish that the prospect of competition from authorized generics during the 180-day exclusivity period, on balance, benefits American consumers.
  • The availability of generic pharmaceuticals reduces prices and increases the therapeutic use of treatments, benefiting consumers.
  • Competition from a generic that successfully challenges the patent of a brand product produces lower prices, even during the 180-day exclusivity period; and the FDA and independent analysts, including the Congressional Research Service, have found that additional competition from authorized generics in that period produces even lower prices.
  • The literature contains no empirical evidence that the prospect of competition from authorized generics has reduced either patent challenges by other generic manufacturers or the development of new generic products.
  • Even without competition from an authorized generic, a generics manufacturer that successfully challenges a patent may face competition during the 180-day period from other generic manufacturers offering the same molecule in different dosages.
  • The ability of drug developers to market or license authorized generic versions of their products also increases their R&D investments, leading to more new drugs.
  • Concerns have been expressed that if heightened competition reduces generic profits, it might also reduce R&D and drug development by those generic firms. Those concerns are misplaced: New research conducted for this study suggests that competition from authorized generics does not reduce R&D by generic manufacturers, and therefore should not reduce or delay the introduction of future generic products. A theoretical explanation for this result is also provided.

Full 16 pages Report is available for download at Repository.

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3.26 Copyright (C) 2008 / Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."

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