Authorized generic drugs, price competition, and consumers' welfare.
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.
Berndt
Ernst R
ER
Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts, USA. erberndt@mit.edu
Mortimer
Richard
R
Bhattacharjya
Ashoke
A
Parece
Andrew
A
Tuttle
Edward
E
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
D004338:Drug Combinations; D016568:Drugs, Generic; C109079:norgestimate, ethinyl estradiol drug combination; D009644:Norgestrel; D017374:Paroxetine; D004997:Ethinyl Estradiol; D002939:Ciprofloxacin