As just mentioned, Eli Lily was one of the few commentators to comment on the substantive issues regarding the FTC’s “study of the use, and likely short- and long-term competitive effects, of authorized generics in the prescription drug marketplace.”  The entire comment is worth reading but here is Lily on the long-term competitive effects of authorized generics:

Questions about the long-term effects of authorized generics are sometimes stated as whether authorized generics might decrease the profitability of the 180-day exclusivity for the fist-filing generic. There are at least three assumptions implicit in this question that the Commission should scrutinize with the information it is collecting:

1. There exist at least some scenarios in which the 180-day exclusivity provisions provide an overall benefit to consumers that outweighs the negatives arising from paragraph IV patent challenges;
2. One potential benefit is that the 180-day exclusivity operates to either accelerate generic drug entry in a manner that provides a net benefit to consumers or increases competition among generics that otherwise would be delayed; and
3. The 180-day exclusivity is necessary to provide a sufficient incentive for paragraph IV challenges that are needed to produce these net consumer benefits.

No analysis of any aspect of the 180-day exclusivity provisions of Hatch-Waxman, including the issue of authorized generics, can produce any practically useful results unless it challenges and attempts to validate and repudiate one or more of these assumptions. Given the numerous situations in which the 180-day exclusivity period is overtly anti-consumer because it delays or diminishes competition among generic drugs that would otherwise occur or because it chills the ability to develop certain types of medical breakthroughs that might otherwise improve health or save lives, it is inherently insufficient to study authorized generics without developing a predicate understanding of whether and to what extent an overall benefit to consumers exits and, if so, the materiality of authorized generics to the net consumer benefit. In term of the impact on generic competition, the evidence may show that in fact the 180-day exclusivity retards, rather than enhances, competition among generics. In many cases the paragraph IV challenge does not result in any acceleration of generic entry whatsoever, and yet the fist filer benefits from the 180-day windfall while other generics who are ready to enter the market must wait and consumers bear the higher generic drug prices during that time.

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