The United States relies on the interactions of private entities – drug manufacturers, health plans and pharmaceutical benefit managers (PBMs) - to achieve value by negotiating prices, operating formularies and implementing other benefit management strategies. The U.S. does not establish or negotiate prices for prescription drugs, as do some other countries. A critical part of the U.S. strategy for achieving value is the competition of lower price generics for brand drugs, once the generics become available for sale. Thus, whether generic drug markets remain competitive or not is of significant policy interest.
This Issue Brief:
- Estimates the impact on generic drug prices of additional competitors in the 24 and 36 months following the expiration of the brand drugs market exclusivity period
- Examines any differences in competitive effects for new generic markets (numbers of entrants and price) in two time periods (2007-2011, 2012-2015)
- Examines differences in competitive effects in markets of different sizes
- Examines measures of generic market competition and prices over the twelve year period 2007 - 2018
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