Report says authorized generics lower drug prices further

May 7, 2007

Data from a new report reveals that competition from authorized generics during the 180-day exclusivity period leads to lower prices and does not reduce or slow the introduction of new generic pharmaceuticals.

Data from a new report reveals that competition from authorized generics during the 180-day exclusivity period leads to lower prices and does not reduce or slow the introduction of new generic pharmaceuticals. Study authors Kevin Hassett and Robert Shapiro claim that competition from authorized generics does not reduce R&D by generic manufacturers and as a result should not reduce or delay the introduction of future generic products. "The core question of the study and the debate is whether or not the ability of authorized generics to compete in that 180-day period reduces the incentives and inclinations of generic producers to challenge the patents of original drugs," said Shapiro. " There is no evidence that the competition from an authorized generic has any effect at all." Shapiro, chairman of Sonecon LLC, a private consulting firm, said that one of the reasons competition from authorized generics does not reduce the incidence of these challenges to the patents of existing drugs is that more than one generic producer can have an exclusivity period. It can be claimed for different dosages of the drugs. "If two generic producers challenge on the same day, they can both get the exclusivity period. Generic producers know that they will face competition."

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