One of the hottest topics at this year’s Spring Meeting, if the overflow, standing-room-only crowd at this afternoon’s “Antitrust and the Pharmaceutical Industry” session is any indication, is authorized generics.  Today, the FTC announced that it will “conduct a study of the use, and likely short- and long-term competitive effects, of authorized generics in the prescription drug marketplace.”

As I mentioned yesterday, the first applicant submitting an ANDA with a Paragraph IV Certification for a generic version of a pioneer drug receives a 180-day period of marketing exclusivity before other ANDAs for the same generic drug can be approved by the FDA.   In short, the “authorized generic” situation arises when the brand name manufacturer authorizes a company (either a third party or a subsidiary of the brand name manufacturer) to market a generic version of the brand name drug.  As the FTC notice states:

This marketing exclusivity period granted to certain generic first-filers, however, does not preclude competition from “authorized generics” that have an approved New Drug Application (NDA) on file with the FDA. Recently, brand-name drug makers have begun marketing authorized generics at exactly the same time the generic first-filer is beginning its 180-day marketing exclusivity period, leading to questions about the effects of authorized generics on pharmaceutical competition. The goal of the Commission’s study will be to assess the likely short- and long-run effects of market entry by authorized generics on generic drug competition. Among other things, the study will examine actual wholesale prices (including rebates, discounts, etc.) for brand-name and generic drugs, both with and without competition from authorized generics; business reasons that support authorized generic entry; factors relevant to the decisions of generic firms about whether and under what circumstances to seek entry prior to patent expiration; and licensing agreements with authorized generics. The data collected will enable the FTC to advance the understanding of the effects of generic entry on prescription drug prices – in particular, the role of the 180-day exclusivity period in generic competition prior to patent expiration – beyond what is available in the economic literature today.

Technorati Tags: antitrust, authorized generics, pharmaceuticals, FTC

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