Generic Exclusivity Price Slope Impact of the patent cliff for an illustrative drug
Generics gives something to the legacy drug companies and gives incentive to the generic drug companies to enter the market Generic drugs can still be marketed at 100x the price of its manufacturer Single source generic drug is basically a monopoly Patent protection and FDA market exclusivity based on their own data o Anyone else who wants to enter the market needs to go through the FDA approval -- ultimately gives small return in investment o No pathway to generic drug company
Impact of Extensions on Brand Drug Exclusivity
protection Introduction of Hatch Waxman had the years extended into 11 years and then URAA extended to about 14 years Pediatric exclusivity -- drug companies had no mandate on testing their drugs on children o Liability was much higher and market was smaller o A lot of drugs would be approved for adults and then leave to pediatrician to decide whether to try on children and leaves no liability to the manufacturers o FDA reasoned -- 6 month extensions of market exclusivity in exchange for doing the drug testing on children Enormous payback for doing testing on children -- therefore we see that the drugs that are being tested on children are not the ones that are most effectively for children but those that have highest annual sales What is and what is not a major improvement on existing drugs? -- a big problem
Over the Counter Status Characteristics of OTC drugs: o Benefits outweigh the risks o Potential for misuse and abuse is low o Consumer can use them for self-diagnoses condition o Can be adequately labeled o Health practitioners are not needed for the safe and effective use of the products Only two drugs that should be prescribed:
o Drugs that can easily be misused o Antibiotics -- free access to it can be harmful -- may compromise the population Used to the idea of prescription which is why we are ok with the notion -- counterexample: bleach, etc. Why do we feel the need to regulate this particular group of chemicals rather than other types? Physicians tend to be dismissive of OTC status Consumers like prescription drugs much better than OTC because we get insurance on it but not on OTC drugs Drug companies usually apply for OTC status but insurance companies are starting to apply for it because they don't want to pay for the drugs anymore Demand for drugs tend to increase when it goes OTC Hatch Waxman Act gives generic companies market exclusivity for 6 months but after that everyone than enter the market and do not need to go through the entire process as the drug has already been approved o The generic company files the abbreviated process
NEW LECTURE -- Cost-Effectiveness Analysis in Healthcare: In Brief Objectives: Understand different types of economic evaluations:purpose, methods, limitations Think about what it means to quantify health costs andoutcomes
Understand how