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The purpose of this paper is to benchmark current adoption of green chemistry (GC) practices by the innovative and generic pharmaceutical companies and examine the drivers, barriers and future opportunities.

The authors examined publicly available data for the top 10 “big pharma” and top ten generic drug manufacturers. Using the IQ Green Chemistry working group framework for effective GC programs, they scored each of the 20 companies in seven key areas.

The study finds that generic drug companies have not embraced GC at the level of the innovative pharmaceutical companies (average GC score of 2 vs 11 for “big pharma”). Top two barriers for them include: lack of pressure and incentives, and the burdensome regulatory process for making changes in the manufacturing process.

The research is based on publicly disclosed information. It is possible that some generic drug manufacturers have begun to work internally on GC but have not disclosed externally yet. Future research should include a survey or interviews of generic drug manufacturers.

The company-level analysis, benchmarking framework and results are of value for researchers and practitioners interested in advancing greater adoption of GC by the pharmaceutical industry.

This study provides the first company-level benchmarking of GC adoption by the largest innovative and generics drug manufacturers. It contributes to the literature on the barriers and drivers for greater adoption of GC.

This paper aims to investigate why brand-name drugs are priced higher than their generic equivalents in the US market. The authors hypothesize that some consumers have a preference for brand names, which outweighs the cost savings realized by switching to generics. Consumers may prefer a brand drug because the brand may have a higher perceived quality due to advertising and other promotional activities. Additionally, individuals are habitual in their consumption of prescription drugs, which leads to continued use of the brand in the face of generic competition.

The authors develop a structural demand model and proceed to estimate it using wholesale price and demand data from the years 2000 through 2004.

The results of our analysis reveal that customers have a strong preference for brand drugs. In addition, consumers exhibit high switching costs for prescription drugs.

Considering the price and quantity of prescriptions filled each day, determining why brand drugs do not lower their prices to compete with their generic equivalents is an important question. Unfortunately, the existing literature only acknowledges this counter-intuitive business practice, but does not mathematically explain it. The authors address this knowledge gap in literature and provide important insight for all players in this industry including consumers, pharmaceutical manufacturers and health insurance companies.

Many people in developing countries are suffering from serious diseases, such as HIV and tuberculosis. On the other hand, drug patents impact the availability of the drug for patients. Pharmaceutical technology transfer is widely used by domestic and foreign pharmaceutical enterprises because it promotes the availability of the drug for patients. The purpose of this paper, which is on drug technology transfer, is mainly to discuss how to solve the conflict between drug patent protection and public health from the perspective of the law, but not from the perspective of economics. To fill this gap, the authors introduce a model in the prescription drug market and analyze how a foreign manufacturer that produces brand name drugs authorizes a domestic enterprise that produces common drugs.

In this paper, the authors consider a situation that if the patent holders are provided a certain amount of compensation, then whether compulsory licensing would be an effective tool to promote competition and improve the availability of drugs. Furthermore, they also consider three different cooperation mechanisms, namely, fixed-fee contract, royalty contract and two-part tariff contract, under the case of technology transfer and give the condition of which contract would be better under different scenarios.

It is found that the product differentiation and the agent behavior of doctor in the domestic market have a deep impact on the foreign enterprise’s decision on technology transfer. If both fixed-fee contract and royalty contract are permitted, foreign enterprise will choose different transfer contracts under different conditions. Under two-part tariff contract, it is equivalent to a fixed-fee or royalty contract under certain conditions. Furthermore, all contracts can improve patients’ benefits, while the royalty contract and the two-part tariff contract would reduce importer’s social welfare under certain conditions.

Prescription drugs can treat many acute diseases and improve people’s quality of life. On the other hand, it requires investment in pharmaceutical research and development and is hard to afford the drug for the people living in poverty. This paper tries to solve the problem by introducing three cooperation contracts. The authors consider an innovative drug company and a regular drug company. The regular drug company can improve the quality of its drug by signing a technology transfer agreement with the innovative company. Three contracts are discussed in this paper; they are fixed-fee contract, royalty contract and two-part tariff contract. The authors examine the impact of different contracts on the companies’ profit, patients’ benefit and social welfare. It is found that quality differentiation of drugs and doctor behaviors can have large impacts on the company’s decision about technology adoption as well as contract choice strategies. In all of the three contracts, patients’ benefit improves, while the profit of the two companies and social welfare can increase or decrease under different contracts.

The Supreme Court’s decision in Federal Trade Commission v. Actavis, Inc. is a challenge to conventional antitrust analysis. Conventional civil antitrust cases are decided by a preponderance of the evidence. This means that conduct challenged under the rule of reason is only condemned if the conduct resulted in more competitive harm in the actual world than a world without the alleged violation. Under conventional analysis, the intent of the parties also plays only a supporting role in determining whether the conduct was anticompetitive. A holder of a valid patent has a right to exclude others practicing the patented technology. And, the patent holder is not assumed to have market power because it expended resources in maintaining exclusionary rights. Actavis creates doubts about these propositions in circumstances beyond the “reverse” payment settlement of a patent suit that may have delayed an alleged infringer market entry. This chapter explores whether applying Actavis logic to antitrust litigation can result in condemnation of practices where there is little chance of an anticompetitive effect, where the patent holder likely has a valid and infringed patent, where there is little reason to believe that the patent holder has market power, and where only one party, or no parties, to an agreement have an anticompetitive intent. This chapter also investigates whether Actavis creates new problems with standing analysis, damages calculations, and the balancing of efficiencies against anticompetitive effects. Nevertheless, the lower courts have begun to extend the logic of Actavis. This is apparent in the condemnation of no-Authorized-generic settlements.

The purpose of this paper is to take a close look at competition among the generic entrants during the first three years after patent expiration and examine whether there is a first mover advantage. Pharmaceutical markets experience the entry of numerous generic firms upon expiration of the brand firm’s patent.

A random effect nested logit model of competition that allows for competition between the brand drug and generics, and among multiple generic drugs is specified. The model accommodates the effects of prices, detailing, sampling, journal advertising, time-in-market and molecule-specific characteristics. The model is estimated on cross-section time-series data for 49 molecules in which the brand drug lost patent exclusivity between 1992 and 2000.

Strong evidence that the early generic entrant enjoys a substantial market share and profit advantage over the second and the third entrants, after controlling for differences in marketing activities was found. In addition, evidence suggesting that the advantage is due to the response of the retail pharmacy channel and due to differential effectiveness of advertising and pricing between earlier versus later entrants was found.

This paper is the first to empirically model first mover advantage among undifferentiated products. The findings are useful for regulators in pharmaceutical and healthcare industries. They can also shed light on other industries where there is little or no quality differentiation, such as commodity trading, open-source software distribution and online banking.

This research studies the effect of deregulation of price cap in pharmaceutical market. Price regulation (either through price cap or reference price) is common practice in the pharmaceutical market but recently there are increasing voices calling for deregulation claiming that deregulation could help in lowering drug price and increase revenue of pharmaceutical firms. Upon those callings, Chinese government removed the price cap regulation in June 2015. The author uses this natural policy experiment to study this effect.

In this study, the author applied the interrupted time series analysis (ITSA) on the revenue data of nine categories of both generic and branded drugs in China from March 2011 to August 2016 (the time frame includes both before and after of the initialization of the deregulation) and analyzed the effect of deregulation.

The results showed that, whether the revenue of drugs will increase or decrease after the deregulation of price cap depends on the level of competition and the change of patterns of the branded and generic drugs are different. When HHI (Herfindahl–Hirschman index) is sufficiently low (competition is high), revenue does not change as a result of deregulation, when HHI is moderately low (moderate competition), revenue from generic drugs will decrease significantly and revenue from branded drugs will increase significantly, and when HHI is high (low competition), revenue from generic drugs will increase significantly and revenue from branded drugs will decrease significantly.

This is a unique study with a unique data set. Most previous studies focus on regulation of drug price and analyze how this may affect drug revenue; however, this is a natural policy experiment of de-regulation. Moreover, previously most studies focus on reference pricing regulation and this is price-cap, a different mechanism that is rarely studied. The originality/value is high of this article.

Tom McKillop, CEO of AstraZeneca, faced the classic quandary of large pharmaceutical firms. The firm's patent for Prilosec (active ingredient omeprazole) was expiring. Severe cost-based competition from generic drug manufacturers was inevitable. Patent expirations were nothing new for the US$15.8 billion in revenues drug firm, but Prilosec was the firm's most successful drug franchise, with global sales of US$6.2 billion. How could the company innovate its way around the generic cost-based competition and avoid the drop in revenues associated with generic drug market entry? AstraZeneca had other follow-on drugs in the pipeline—namely Nexium, an improvement on the original Prilosec molecule. Additionally, the company had the opportunity to introduce its own version of generic omeprazole, hence becoming the first mover in the generic segment, and/or introduce an OTC version of omeprazole that might tap into other markets. Ideally, AstraZeneca would like to move brand-loyal Prilosec customers to Nexium. In this market, direct-to-consumer advertising has remarkable efficacy. Classical marketing challenges of pricing and promotion need to be resolved for the Nexium launch as well as possible product and place challenges for the generic or OTC opportunity. Which combination of marketing options will allow the firm to best sustain the value of the original omeprazole innovation?

The central objective of the case is to teach students how marketing variables can be used by first movers with diverse product portfolios to fend off severe price competition. These variables include pricing, promotion, product, and place (distribution) options as considered in the context of branded, generic, and OTC pharmaceutical market segments.

The paper aims to study how global pharmaceutical companies such as Pfizer have managed the challenges of pharmaceutical patent expiry.

A case study method was applied. The best-selling brand drug over the past 10 years – Lipitor – was chosen as the case target.

For dealing with this, this paper describes all the details of the corresponding strategies of Pfizer before and after patent expiration of Lipitor. Before patent expiry, Pfizer undertook the activities of direct-to-consumer marketing, pricing strategy for competition, legal delay and me-too drug R&D. After patent expiry, Pfizer chose to carry out continuous marketing for brand, rebate strategy, authorized generics and change to over-the-counter. In addition, diversity and globalization strategy was applied before and after patent expiry.

This research provides strong implication for managing pharmaceutical products before and after patent expiry.

It is strongly recommended for both brand and generic drug companies to design strategies to meet the challenges of pharmaceutical patent expiry.

For the global pharmaceutical market, a conclusion can be drawn that, nowadays, the “patent cliff” is the most significant factor influencing decision-makers to consider futuristic policies. Further, it is also a considerably effective solution for reducing health-care costs for policymakers.

This paper contributes to the field of patent expiry management in high-tech industries such as pharmaceuticals.

The case described the issues faced by a mid-sized Indian generic pharmaceutical firm, in its attempt to acquire a small unlisted Japanese generics manufacturer. It showcases the strong motivation of a successful emerging market pharmaceutical firm to expand into the developed market, buoyed by its cost competitiveness. The case presents an opportunity to discuss the trade-offs involved with most of the dynamic decisions in a cross-border acquisition, such as estimation of synergies and value, bidding, and financing the acquisition. The case may be used in programmes on valuation, and mergers and acquisitions.

Disruptions and shortages of drugs have become severe problems in recent years, which has triggered strong media and public interest in the topic. However, little is known about the factors that can be associated with the increased frequency of shortages. In this paper, the authors analyze the drivers of drug shortages using empirical data for Germany, the fourth largest pharmaceutical market.

The authors use a dataset provided by the German Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte [BfArM]) with 425 reported shortages for drug substances (DSs) in the 24-month period between May 2017 and April 2019 and enrich the data with information from additional sources. Using logistic and negative binomial regression models, the authors analyze the impact of (1) market characteristics, (2) drug substance characteristics and (3) regulatory characteristics on the likelihood of a shortage.

The authors find that factors like market concentration, patent situation, manufacturing processes or dosage form are significantly associated with the odds of a shortage. The authors discuss the implications of these findings to reduce the frequency and severity of shortages.

The authors contribute to the empirical research on drug shortages by analyzing the impact of market characteristics, DS characteristics and regulatory characteristics on the reported shortages. The authors’ analysis provides a starting point for better prioritizing efforts to strengthen drug supply as it is currently intensely discussed healthcare authorities.