New research at the University of East Anglia (UEA), UK has highlighted the need for changes to the system where pharmaceutical companies forge deals with competitors to prevent the production of generic medicines.

As part of these ‘pay-for-delay’ agreements, a branded drug manufacturer makes payment to a generic maker for delaying market entry of cheaper alternatives, said the researchers.

The generic maker is said to receive a payment and/or a licence to enter the market at a later date, but prior to the expiration of the patent, to delay their competition.

Such type of agreements, which may prevent entry by other generic companies, are under the scrutiny of competition authorities in Europe and the US for being anti-competitive.

Researchers at UEA’s School of Economics and Centre for Competition Policy created a model of generic entry and patent litigation. It captures key features of market entry requirements for drugs and patent litigation in Europe, as well as the US.

Instead of the existing system in the US, where generic exclusivity is provided to the first applicant, UEA researchers call for a system that rewards the first successful competitor, expected to reduce pay-for-delay pharmaceutical deals.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In addition, researchers say that a branded firm should be prevented from introducing a pseudo or authorised generic against an independent generic that wins patent litigation.

UEA School of Economics and Centre for Competition Policy researcher Dr Farasat Bokhari said: “While pay-for-delay deals may be beneficial to some extent, in that they might save courts and administrative bodies, such as patent offices, time and effort, they allow branded drug firms to charge monopoly prices and in a typical deal there may be several years delay in a cheaper version becoming available.”

Findings from previous studies that a pay-for-delay agreement can cost nearly $3.5bn per year to US consumers and can delay generic market entry by up to five years.