Authorized Generic Entry prior to Patent Expiry: Reassessing Incentives for Independent Generic Entry

Silvia Appelt

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: Patent holders attempt to mitigate the loss of monopoly power by authorizing generic entry prior to patent expiry (early entry). Off-patent competition may be adversely affected if early entry substantially lowers the attractiveness of subsequent generic entry. This study assesses the impact of early entry, examining generic entry decisions made in the course of recent patent expiries. Using micro data and accounting for the endogeneity of early entry, I estimate recursive bivariate probit models of entry. Early entry has no significant impact on the likelihood of generic entry. Rent-seeking rather than strategic entry-deterrence motives drive early entry decisions.

Keywords: Generic Entry; Early Entry; Anticompetitive Practices (search for similar items in EconPapers)
JEL-codes: C35 I11 L41 O34 (search for similar items in EconPapers)
Date: 2010-04
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Citations: View citations in EconPapers (3)

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