Product Switching in the Pharmaceutical Industry: Ripe for Antitrust Scrutiny?

2010 ◽  
Vol 7 (2) ◽  
pp. 119-130
Author(s):  
Seth Silber ◽  
Kara Kuritz
Keyword(s):  
Market Share ◽  
Generic Drug ◽  
Prescription Drugs ◽  
New Drugs ◽  
Pharmaceutical Companies ◽  
Brand Name ◽  
Generic Entry ◽  
Product Switching ◽  
Drug Companies ◽  
Antitrust Laws

Since the Hatch-Waxman Act was enacted in 1984, generic drug companies have benefited from its provisions to facilitate approval of generic alternatives to brand-name pharmaceuticals. Upon generic entry, consumers of prescription drugs benefit from large discounts as brand manufacturers lose significant market share to these lower-priced alternatives. Over time, brand-name drug manufacturers have undertaken strategies, such as ‘product switching’ or ‘product hopping’, that may delay or prevent generic entry and protect their market share. Generic drug manufacturers, drug purchasers and antitrust authorities have begun looking to the antitrust laws to address these strategies and their impact on generic entry. This article discusses the regulatory framework under which pharmaceutical companies introduce new drugs, two prominent cases in which courts have wrestled with whether product switching violates the antitrust laws, factors that might support an antitrust claim for product switching, and the FTC's interest in challenging product switching.

Fake Pharmaceuticals: How They and Relevant Legislation or Lack Thereof Contribute to Consistently High and Increasing Drug Prices

2003 ◽  
Vol 29 (4) ◽  
pp. 525-542
Author(s):  
Merri C. Moken
Keyword(s):  
United States ◽  
Prescription Drugs ◽  
The United States ◽  
Pharmaceutical Products ◽  
New Drugs ◽  
Pharmaceutical Companies ◽  
Brand Name ◽  
Potential Factors ◽  
Counterfeit Pharmaceuticals ◽  
New Applications

The use of pharmaceutical products in the United States has increased more than the use of any other health resource from 1960 to 1990. In excess of 9,600 drugs were on the market in 1984, and the Food and Drug Administration (“FDA”) approves approximately 30 new drugs and countless new applications for alterations of already existing drugs each year. In 2001, the $300 billion pharmaceutical industry sold $154 billion worth of prescription drugs in the United States alone, nearly doubling its $78.9 billion in sales in 1997. With such a rapid increase in market domination and expenditures, the U.S. government and many hospitals have focused their attention on the sales and pricing practices of pharmaceutical companies, as well as other potential factors contributing to these escalating prices. One such cause of the steadily increasing prices of brand name pharmaceuticals is the sale of fake or counterfeit pharmaceuticals (also called “look-alike” drugs).

The Anticompetitive Effects of Common Ownership: The Case of Paragraph IV Generic Entry

2020 ◽  
Vol 110 ◽  
pp. 569-572 ◽  
Author(s):  
Jin Xie ◽  
Joseph Gerakos
Keyword(s):  
Generic Drug ◽  
Pharmaceutical Companies ◽  
Generic Manufacturer ◽  
Brand Name ◽  
Generic Entry ◽  
Common Ownership ◽  
Settlement Agreement

Brand-name pharmaceutical companies often file lawsuits against generic drug manufacturers that challenge the monopoly status of patent-protected drugs. Institutional horizontal shareholdings, measured by the generic shareholders' ownership in the brand-name company relative to their ownership in the generic manufacturer, are significantly positively associated with the likelihood that the two parties enter into a settlement agreement in which the brand pays the generic manufacturer to stay out of the market.

Proposed Solutions for Rising Drug Prices

2021 ◽  
pp. 38-61
Author(s):  
Neumann Peter J. ◽  
Cohen Joshua T. ◽  
Ollendorf Daniel A
Keyword(s):  
Collective Bargaining ◽  
Generic Drug ◽  
New Drugs ◽  
Patient Access ◽  
Brand Name ◽  
Pharmacy Benefit ◽  
High Drug ◽  
Drug Prices ◽  
Market Protection ◽  
Drug Companies

This chapter explores proposed solutions for high drug prices. They include measures to rein in “middlemen” pharmacy benefit managers who may artificially inflate prices; increase generic drug competition to prevent price spikes for older, off-patent drugs; enhance competition for new drugs after brand-name products reach the intended period of market protection; align US drug prices with the lower prices available in other wealthy countries; and leverage the collective bargaining power of government payers to compel drug companies to accept lower prices for their products. Policies that force drug prices down can save money but risk choking off the development of important new advances, limiting patient access to their health benefits. Moreover, the policy solutions typically offered are incremental solutions that will likely put a modest dent in the nation’s $500 billion annual drug bill. Most important, they fail to link a drug’s price to its value.

scholarly journals The Impact of Tiered-Pricing Framework on Generic Entry in Canada

2020 ◽  
Author(s):  
Wei Zhang ◽  
Huiying Sun ◽  
Daphne P. Guh ◽  
Larry D. Lynd ◽  
Aidan Hollis ◽  
...  
Keyword(s):  
Generic Drug ◽  
Prescription Drugs ◽  
Generic Drugs ◽  
Generic Entry ◽  
Tiered Pricing ◽  
Significant Difference ◽  
The Impact ◽  
Time Varying Covariates ◽  
Public Drug ◽  
Pricing Framework

Background: Generic drug prices have been capped at specified percentages of the interchangeable branded drug’s price by the Canadian provincial public drug plans since 1993. The Pan-Canadian Pharmaceutical Alliance, formed as a coalition by the provinces/territories in Canada, implemented an alternative approach, a tiered-pricing framework (TPF) for new generic drugs on April 1, 2014, under which the percentage varies with the number of generic firms in each market. We evaluate the impact of the TPF on generic entry, ie, listing in public drug plans in Canada. Methods: Our study compared the pre-TPF period (01/01/2012-03/31/2014) with the TPF period (04/01/2014- 06/30/2016). Prescription drugs from nine provincial public drug plans were grouped into a "market" if they had the same active ingredient and strength, route of administration, and dosage form. Each "market" was contestable by generics and met the eligibility criteria for TPF. At the "market" level, Cox proportional-hazards models with time-varying covariates were used to measure the impact of the TPF on the first generic listing in any provincial public drug plan in Canada relative to the first launch date worldwide. Results: A total of 189 markets in Canada were selected for the analyses. Generic drugs in small markets were more likely to be listed in Canada during the TPF period compared to the pre-TPF period (hazard ratio [HR], 95% CI: 3.81, 1.51-9.62). There was no significant difference in generic drug listings in large markets between the two policy periods. Conclusion: TPF speeds up generic entry in small markets and generates the benefits of generic competition while avoiding the pitfalls of the previously employed price-cap regulations.

Blockbuster Drugs

2014 ◽  
Author(s):  
Jie Jack Li
Keyword(s):  
Drug Discovery ◽  
Pharmaceutical Industry ◽  
Prescription Drugs ◽  
Business Models ◽  
Scientific Discovery ◽  
New Drugs ◽  
Pharmaceutical Companies ◽  
Blockbuster Drug ◽  
A Minor ◽  
Future Landscape

For the world's largest prescription drug manufacturers, the last few years have been a harrowing time. Recently, Pfizer's Lipitor, GlaxoSmithKline's Advair, AstraZeneca's Seroquel, and Sanofi-Aventis and Bristol-Myers Squibb's Plavix all came off patent in the crucial U.S. market. This so-called "patent cliff" meant hundreds of billions of dollars in lost revenue and has pharmaceutical developers scrambling to create new drugs and litigating to extend current patent protections. Having spent most of his career in drug discovery in "big pharma," Dr. Li now delivers an insider's account of how the drug industry ascended to its plateau and explores the nature of the turmoil it faces in the coming years. He begins with a survey of the landscape before "blockbuster drugs," and proceeds to describe how those drugs were discovered and subsequently became integral to the business models of large pharmaceutical companies. For example, in early 1980s, Tagamet, the first "blockbuster drug," transformed a minor Philadelphia-based drug maker named SmithKline & French into the world's ninth-largest pharmaceutical company in terms of sales. The project that delivered Tagamet was nearly terminated several times because research efforts begun in 1964 produced no apparent results within the first eleven years. Similar stories accompany the discovery and development of now-ubiquitous prescription drugs, among them Claritin, Prilosec, Nexium, Plavix, and Ambien. These stories, and the facets of the pharmaceutical industry that they reveal, can teach us valuable lessons and reveal many crucial aspects about the future landscape of drug discovery. As always, Dr. Li writes in a readable style and intersperses fascinating stories of scientific discovery with engaging human drama.

scholarly journals Interrupted time-series analysis of the impact of generic market entry of antineoplastic products in China

BMJ Open ◽  
2018 ◽  
Vol 8 (7) ◽  
pp. e022328 ◽  
Author(s):  
Xiaodong Guan ◽  
Ye Tian ◽  
Dennis Ross-Degnan ◽  
Chunxia Man ◽  
Luwen Shi
Keyword(s):  
Time Series ◽  
Antineoplastic Agents ◽  
Generic Drugs ◽  
Interrupted Time Series ◽  
Public Hospitals ◽  
New Drugs ◽  
Antineoplastic Drugs ◽  
Brand Name ◽  
Generic Entry ◽  
The Impact

ObjectivesThe rapid growth of pharmaceutical costs is a major healthcare issue all over the world. The high prices of new drugs, especially those for cancer, are also a concern for stakeholders. Generic drugs are a major price-reducing opportunity and provide more societal value. The aim of this research is to analyse the impact of generic entry on the volume and cost of antineoplastic agents in China.MethodsAn interrupted time-series design examined monthly sales of three antineoplastic drugs (capecitabine, decitabine, imatinib) from 699 public hospitals during January 2011 to June 2016. The first generic entry times (December 2013, December 2012, August 2013, respectively) were regarded as the intervention time points. We estimated changes in volume and cost following the generic entry.ResultsWe found that generic entry was associated with increases in the volume of three antineoplastic agents and decreases in their costs. In terms of volume, generic entry was associated with increases in use of capecitabine, decitabine and imatinib by 815.0 (95% CI −66.5 to 1696.5, p>0.05), 11.0 (95% CI 3.7 to 18.3, p=0.004) and 2145.5 (95% CI 1784.1 to 2506.9, p<0.001) units. The entry of generic antineoplastic drugs reduced the monthly cost trend of three agents by ¥3.1 (95% CI −¥3.6 to −¥2.6, p<0.001), ¥84.7 (95% CI −¥104.7 to −¥64.6, p<0.001) and ¥21.3 (95% CI −¥24.2 to −¥18.4, p<0.001), respectively. The entry of generic drugs attenuated the upward trend in volume of three brand-name drugs and even triggered reductions in the volume of brand-name capecitabine. The entry of generics was accompanied by significant increase of ¥2.6 in monthly brand-name decitabine cost (95% CI ¥0.2 to ¥5.1, p=0.04).ConclusionOur findings suggested that entry of generic drugs impacted use and cost of antineoplastic medicines in China. Generic drugs may improve the availability and the affordability of antineoplastic agents, which would benefit more patients.

Benchmarking green chemistry adoption by “big pharma” and generics manufacturers

2017 ◽  
Vol 24 (5) ◽  
pp. 1414-1436 ◽  
Author(s):  
Vesela Veleva ◽  
Berkeley W. Cue Jr
Keyword(s):  
Green Chemistry ◽  
Generic Drug ◽  
Design Methodology ◽  
Future Research ◽  
Pharmaceutical Companies ◽  
Content Type ◽  
Drug Companies ◽  
Practical Implications ◽  
Level Analysis ◽  
Two Barriers

Purpose The purpose of this paper is to benchmark current adoption of green chemistry (GC) practices by the innovative and generic pharmaceutical companies and examine the drivers, barriers and future opportunities. Design/methodology/approach The authors examined publicly available data for the top 10 “big pharma” and top ten generic drug manufacturers. Using the IQ Green Chemistry working group framework for effective GC programs, they scored each of the 20 companies in seven key areas. Findings The study finds that generic drug companies have not embraced GC at the level of the innovative pharmaceutical companies (average GC score of 2 vs 11 for “big pharma”). Top two barriers for them include: lack of pressure and incentives, and the burdensome regulatory process for making changes in the manufacturing process. Research limitations/implications The research is based on publicly disclosed information. It is possible that some generic drug manufacturers have begun to work internally on GC but have not disclosed externally yet. Future research should include a survey or interviews of generic drug manufacturers. Practical implications The company-level analysis, benchmarking framework and results are of value for researchers and practitioners interested in advancing greater adoption of GC by the pharmaceutical industry. Originality/value This study provides the first company-level benchmarking of GC adoption by the largest innovative and generics drug manufacturers. It contributes to the literature on the barriers and drivers for greater adoption of GC.

Recent Developments in Health Law

2012 ◽  
Vol 40 (1) ◽  
pp. 165-170
Author(s):  
Brenna Jenny
Keyword(s):  
Generic Drug ◽  
Generic Drugs ◽  
Tort Law ◽  
Drug Manufacturer ◽  
Recent Change ◽  
Brand Name ◽  
Drug Companies ◽  
Drug Regulations ◽  
Recent Developments ◽  
The Individual

When the Supreme Court in PLIVA v. Mensing determined that certain state tort law failure-to-warn claims against generic drug companies were pre-empted by federal drug regulations, the pronouncement was met with substantial criticism. In light of the Court's decision two years earlier in Wyeth v. Levine, where the Court allowed a similar claim against a brand-name drug manufacturer to proceed, many complained the resulting Levine-Mensing dichotomy created an arbitrary distinction between brand-name and generic drugs, allowing an injured patient's ability to recover to hinge solely on the happenstance of whether the individual had taken the brand-name or generic version. But, although Mensing cut back significantly on the ability of plaintiffs to make state law failure-to-warn claims against generic drug manufacturers, the case did not completely prohibit such claims. Instead, the Court banned only failure-to-warn claims premised on an argument that the generic drug company needed to change its label in order to meet state tort law duties. If plaintiffs can advance other theories independent of a formal label change, such as a failure to adequately warn a physician about a recent change to the drug's label, then they may still be able to proceed against generic drug manufacturers.

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