Generic competition and market exclusivity periods in pharmaceuticals

Henry G. Grabowski and Margaret Kyle
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Henry G. Grabowski: Department of Economics, Duke University, Durham, NC 27708, USA, Postal: Department of Economics, Duke University, Durham, NC 27708, USA
Margaret Kyle: Departments of Strategy and Economics, London Business School, London NW1 4SA, Postal: Departments of Strategy and Economics, London Business School, London NW1 4SA

Managerial and Decision Economics, 2007, vol. 28, issue 4-5, pages 491-502

Abstract: In this paper we examine generic competition and market exclusivity periods for pharmaceuticals experiencing their initial generic entry between 1995 and 2005. We find that generic competition has increased over several dimensions. First, an increasing number of drugs are subject to generic entry, including drugs with relatively modest annual average sales. Second, drugs with larger sales attract more generic entrants and have shorter market exclusivity periods than smaller selling drugs. Third, blockbuster drugs with annual sales in excess of $1 billion have experienced significant decreases in their market exclusivity periods in recent years. We also find that Hatch-Waxman Act patent challenges have negatively affected market exclusivity periods over the 1995 to 2005 period. Copyright © 2007 John Wiley & Sons, Ltd.

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