N° 1-2006

Drugs generics : Which strategies for pharmaceutical companies ?

ARTICLE : Intellectual property (patents) - Generic drugs - pharmaceutical companies è defensive strategies - Brand image - Legal monopoly - Legal market exclusivity period - Launch of second generation products - Barriers to entry - Scrutiny by antitrust authorities (US case law) - Abuse of the patent system and other regulatory procedures - Agreements with competitors - Assessment of restrictive business practices

Facing patent expiry and competition from generic drugs, pharmaceutical companies rely on a wide array of defensive strategies, building on the innovator’s brand image, the extension of the legal market exclusivity period, or the launch of second generation products. While all of these strategies share the common purpose of limiting the impact of generic competition, their anticompetitive effects remain difficult to gauge. Some of these methods have nevertheless recently come under scrutiny by antitrust authorities, especially in the United States. Several cases have thus unveiled that drug makers had abused the patent system and other regulatory procedures to obtain an unsubstantiated extension of their legal monopoly. Likewise, several brand name companies sought to delay market entry of generic drugs by entering into agreements with their generic competitors. However, as we will show, the assessment of such restrictive business practices is not without ambiguity.

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