Given the pressure being put upon pay-for-delay agreements, the number of authorised generics hitting the market is set to increase, claims a new study.
The analysis, from Datamonitor, says that the number of authorised generics agreements will grow, “in tandem with the increasing convergence” between branded and copycat companies. It adds that the growing trend for big pharma – notably GlaxoSmithKline, Sanofi-Aventis and Pfizer – to bolster their non-branded presence also means that “the strategy of fielding own-generics will gain traction”.
The attraction of AGs to innovative drugmakers is clear as it provides them “with a means of capitalising upon the…erosion of their own brands” and maximising revenue streams from a mature product. However, Datamonitor notes that “the generics industry is more divided on the issue”.
For those companies “with the wherewithal to aggressively challenge patents and get to market early, AGs are a considerable irritant”. However, for smaller players, these deals represent a valuable competitive advantage, “and this is more true in the USA than Europe”, the report claims.
Due to their sale during the 180-day period of market exclusivity awarded to first-to-file generics companies in the USA, AGs are considerably more potent in the American market. As such, there have been calls from some in the generics industry across the Atlantic for the ‘Hatch-Waxman loop-hole’ to be closed to prevent such sales during that period of exclusivity.
Datamonitor healthcare strategy analyst Pam Narang says “detractors insist that AG sale at this time is anticompetitive and a deterrent to early generics entry”. However, “given the accelerated price erosion that characterizes AG sale during the 180 days of market exclusivity, an outright ban is unlikely in the short-term,” she says.
Datamonitor has analysed 40 AG launches that occurred in the USA between 2004 and 2008 and although only a third of the 14 branded companies under investigation had the opportunity to market an own-AG, these constituted 45% of all AG launches. Moreover, not only was Pfizer the most frequent branded partner involved in own-AG launches, it was also the most common branded partner in all of the agreements analysed, involved in 30% of all launches.
The US Federal Trade Commission and the European Commission are looking at “potential collusion between branded and generics companies” in terms of pay-to-delay, but Ms Narang notes that “although the issue of AGs has come under scrutiny across the board, there have yet to be any definitive conclusions regarding their anticompetitive nature”.
She concludes by saying that the FTC’s recent report “actually implies that AGs are pro-consumer, due to their impact on generic price”. Notwithstanding the lobbying efforts of some of the larger generics companies, “AGs look to remain a fixture in the battle between branded and generics pharma in the short-term”.
