The Role of authorized generics in the prescription drug marketplace

Abstract

Authorized generics continue to be a controversial phenomenon in the contemporary pharmaceutical marketplace. Proponents of authorized generics consider them an additional player in a healthy competitive pharmaceutical market environment, while opponents note that the entry of authorized generics may be considered anticompetitive under certain circumstances. This study investigated the market share dynamics associated with authorized generics and their direct competitors during the crucial period of initial generic(s) entry. At the end of the 12 months of generic presence, market shares for authorized generics launched with the 180-day marketing exclusivity of an independent generic in the cases of Zocor^®, Proscar^® and Norvasc^® were 37, 52 and 49 per cent, respectively. Meanwhile, market shares for authorized generics launched without the 180-day marketing exclusivity of an independent generic in the cases of Arava^® and Ambien^® were 21 and 18 per cent, respectively. Authorized generics launched during independent generic 180-day marketing exclusivity dominated the market and had the largest market share when compared to any other single market participant for the case. In the long run, authorized generics might discourage independent generic companies from timely generic introductions. Policy limiting the entry of an authorized generic during the 180-day marketing exclusivity of an independent generic might prevent delayed generic entry.