Trends In Authorized Generic Drug Launches And Their Effects On Competition In Oral-Solid Drug Markets In The US,...

An authorized generic is a brand manufacturer's drug marketed as a generic product. It is the first traditional generic entrant's only potential competition during the 180-day generic exclusivity period. However, the brand manufacturer's ability to withhold its authorized generic represents a valuable bargaining chip that the manufacturer can offer the first traditional generic entrant in exchange for a later start date for generic competition. With data on 146 oral-solid drugs experiencing first generic entry during the period 2016-23, we found evidence for both positive and negative effects of authorized generics on competition. On-invoice prices that pharmacies paid for new generics were 13-18 percent lower when an authorized generic was available. However, authorized generic launches, which were once common, declined markedly in more recent years, which may be partly explained by no-authorized-generic agreements in brand-generic patent litigation settlements. Curtailing these agreements could greatly benefit drug purchasers.