title: Authorized generic drugs, price competition, and consumers' welfare.
abstract: The growing frequency of authorized generics has important implications for the welfare of prescription drug consumers. Authorized generic entry could affect the timing of generic entry, brand-name and generic prices, and generic penetration. We reviewed 1999-2003 data and found that generic entry in the absence of short-run exclusivity restrictions benefits consumers through lower short-run prices. We suggest that these benefits likely also result from authorized generics. We posit that long-run prices and shares are likely essentially unaffected by authorized generics and that potential costs to consumers from any delayed generic entry are likely small.
authors.affiliation: Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts, USA. erberndt@mit.edu
authors.forename: Ernst R
authors.initials: ER
authors.lastname: Berndt
authors.forename: Richard
authors.initials: R
authors.lastname: Mortimer
authors.forename: Ashoke
authors.initials: A
authors.lastname: Bhattacharjya
authors.forename: Andrew
authors.initials: A
authors.lastname: Parece
authors.forename: Edward
authors.initials: E
authors.lastname: Tuttle
mesh_terms: D002939:Ciprofloxacin / Q000191:economics; D003258:Consumer Behavior / Q000706:statistics & numerical data*; D017277:Drug Approval / Q000379:methods / Q000706:statistics & numerical data; D004338:Drug Combinations; D016568:Drugs, Generic / Q000191:economics*; D004997:Ethinyl Estradiol / Q000191:economics; D005252:Fees, Pharmaceutical / Q000706:statistics & numerical data*; D006801:Humans; D008389:Marketing of Health Services / Q000379:methods / Q000706:statistics & numerical data; D009644:Norgestrel / Q000031:analogs & derivatives / Q000191:economics; D017374:Paroxetine / Q000191:economics; D014481:United States
chemical_list: D004338:Drug Combinations; D016568:Drugs, Generic; C109079:norgestimate, ethinyl estradiol drug combination; D009644:Norgestrel; D017374:Paroxetine; D004997:Ethinyl Estradiol; D002939:Ciprofloxacin