PhRMA Study Finds Authorized Generics Lead to Lower Drug Prices
The Pharmaceutical Research and Manufacturers of America (PhRMA), the trade group representing innovator drug companies, released a new study yesterday concluding that authorized generic drugs lead to lower drug prices for consumers. PhRMA commissioned IMS Consulting to conduct the study.
According to PhRMA's press release announcing the study:
The analysis examined case studies with and without authorized generics and found that with an authorized generic on the market during the exclusivity period, discounts to brand medicines were greater--on average 15.8 percentage points greater--than instances when a generic company did not face competition from an authorized generic.
The most common criticism of authorized generics is that they reduce incentives for generic drug companies to develop generic drugs in the first place, by diminishing their profits during the 180-day exclusivity period. Generic drug makers would likely criticize PhRMA's new study on the basis that it does not examine the long-term effects of authorized generics, which might include fewer generic drugs becoming available.
As reported previously on this blog, the FTC is undertaking its own study of authorized generics and expects to complete its study sometime next year.
UPDATE:
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