Patent Wars and Authorised Generics in the USA: Assessing the Issues
1 May 2007
By Dr. Richard Rozek et al.
NERA contributed a chapter to Healthy IPRs: A Forward Look at Pharmaceutical Intellectual Property (edited by Meir Pugatch and Anne Jensen), a new book from the Stockholm Network examining central issues in the field of US pharmaceutical intellectual property rights (IPRs).
The chapter addresses the growing number of US pharmaceutical companies that are selling both brand and generic products. Innovator companies increasingly are offering generic products -- either generic versions of their own brands or generic versions of brands sold by other companies, while imitator companies increasingly are engaging in R&D and selling brand products. The authors examine this trend and focus on the effects of an innovator company offering a generic version of its brand product -- referred to as an "authorized generic" -- either through its own affiliate or by licensing the rights to another company.
The authors conclude that the use of authorized generics is not anticompetitive, as authorized generics create entry opportunities for new companies and create licensing opportunities for existing imitator companies. Authorized generics generate substantial benefits for the healthcare system as they reduce costs to patients and payers, and provide resources for innovative companies to invest in R&D, resulting in the availability of new and improved pharmaceutical products. The authors recommend that payers and policymakers concerned about healthcare costs expand their focus to the activities of all participants involved in creating, selling, and distributing pharmaceutical products to identify potential cost savings.
