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The rise of new product classes such as biologics and complex molecules over the past two decades have brought to light some of the unique market dynamics that such products face. While we have seen and experienced the inception, growth and expansion phase of such products, the ongoing incumbent decline due to loss of exclusivity (LoE) is yet to be fully experienced. This raises the question of how one may go about modelling such a scenario given that forecasting the expected erosion curves accurately can ensure full brand value is retained for pharmaceutical companies. This research looks to analyze the ‘patent cliff’ across varying product classes and, in doing so, understand the drivers behind the different market dynamics post-LoE for traditional molecules, complex molecules and biologics. An extensive list of molecules across various therapeutic areas succumbing to loss of patent exclusivity between 2014 and 2019 were categorized according to product class, and sales data were analyzed to reveal trends across different product classes. The analysis of sales behavior of these compounds revealed distinct tendencies in terms of sales erosion across the various product classes. The largest determinant for the behaviour of a prescription drug post-LoE is the degree of generic competition, which in turn is primarily influenced by the barriers to entry. This research details some of the key challenges relating to regulatory, legal and manufacturing aspects that distinguish biologics and complex molecules from traditional small molecules and ultimately lead to different market dynamics post-LoE. Unlike for traditional small-molecule generics where originator manufacturers have limited options to fend off generics, the greater degree of ‘brand–brand’ competitive dynamics seen in the biologics and complex generics space allows manufacturers of originators to protect market share. This analysis represents a meaningful addition to understanding LoE across various class types and thus highlights the importance of strategic decision making that pharmaceutical companies need to take at LoE.

In the last two decades, many European countries allowed the sale of over‐the‐counter (OTC) drugs outside pharmacies. This was expected to lower retail prices through increased competition. Evidence of such price reductions is scarce. We assess the impact of supermarket and outlet entry in the OTC drug market on OTC prices charged by incumbent pharmacies using a difference‐in‐differences strategy. We use price data on five popular OTC drugs for all retailers located in Lisbon for three distinct points in time (2006, 2010, and 2015). Our results suggest that competitive pressure in the market is mainly exerted by supermarkets, which charge, on average, 20% lower prices than pharmacies. The entry of a supermarket among the main competitors of an incumbent pharmacy is associated with an average 4% to 6% decrease in prices relative to the control group. These price reductions are long‐lasting but fairly localized. We find no evidence of price reductions following OTC outlet entry. Additional results from a reduced‐form entry model and a propensity score matching difference‐in‐differences approach support the view that these effects are causal.

The paper addresses the issue of excessive price abuse under Article 102(a) of the Treaty on the Functioning of the European Union (TFEU), by drawing inspiration from a recent stream of cases (developed first at the national and then at the EU level) involving pharmaceutical companies marketing off-patent drugs. In particular, the two ‘most advanced’ cases are analysed:Aspenin Italy andPfizer/Flynnin the United Kingdom. This new-found attention towards exploitative practices in the form of excessive and unfair pricing by dominant undertakings that have traditionally been subject to a cautious antitrust scrutiny seems worth exploring for a number of reasons, as illustrated in the paper. Ultimately, it is argued that this further ‘interference’ of competition law into the realms of regulation may be actually justified, albeit subject to precise conditions for enforcement, and may pursue policy objectives in the wider context of EU health law.

We study physiotherapy providers’ prices in repeated competitive biddings where multiple providers are accepted in geographical districts. Historically, only very few districts have rejected any providers. We show that this practice increased prices and analyze the effects the risk of rejection has on prices. Our data are derived from three subsequent competitive biddings. The results show that rejecting at least one provider decreased prices by more than 5% in the next procurement round. The results also indicate that providers have learned to calculate their optimal bids, which has also increased prices. Further, we perform counterfactual policy analysis of a capacity-rule of acceptance. The analysis shows that implementing a systematic acceptance rule results in a trade-off between direct cost savings and service continuity at patients’ usual providers.

Biosimilar medicines have shown similarity with the originator biologic and offer a similar clinical outcome generally at a lower cost. This paper identifies benefits of off-patent biologics and biosimilars, and illustrates these benefits with empirical data from Europe. We provide a narrative review of published literature on values and benefits of biosimilars in Europe. The results describe cost savings as the key driver stemming from the lower price of biosimilars, than that of originator products, and from price competition between biosimilar(s), originator, and next-generation products. Cost savings may then translate into a number of other associated benefits. The lower price of biosimilars and similar effectiveness to the originator biologics improve cost effectiveness, implying that reimbursement can be granted or extended to other patient groups, or that the biologic therapy can be moved to an earlier line of treatment. Cost savings from biosimilars can be used to increase patient access to therapy or to increase the number of healthcare professionals. Finally, competition between off-patent biologics and biosimilars may stimulate an innovation in the formulation and development of next-generation biologics. Our paper illustrates that the benefit of off-patent biologics and biosimilars is not restricted to cost savings, but that these medicines may contribute to an expansion of medical treatment options for patients, hence concomitantly contributing to the long-term sustainability of the healthcare system. This review provides a broader view for clinical and economic decision makers and healthcare professionals on the added benefits of off-patent biologics and their use in clinical practice. ispartof: BIODRUGS vol:34 issue:2 pages:159-170 ispartof: location:New Zealand status: published

To provide updated evidence in a series of analyses of U.S. trends over the past two decades in key financial metrics for branded drugs: market exclusivity periods (MEPs, the time between launch and first generic entry) for new molecular entities (NMEs); the probability, timing and number of patent challenges under Paragraph IV of the Hatch-Waxman Act; and the intensity of generic penetration.As previously, we used IQVIA National Sales Perspectives U.S. data to calculate MEPs for the 356 NMEs experiencing initial generic entry from 1995 through 2019, the number of generic competitors for twelve months afterward (by prior sales level), and generic shares. We calculated the probability, timing and number of Paragraph IV challengers using Abbreviated New Drug Application (ANDA) approval letters, the FDA website, public information searches, and ParagraphFour.com.For NMEs experiencing initial generic entry in 2017-19, the MEP was 13.0 years for drugs with sales greater than $250 million in 2008 dollars the year before generic entry (NMEs$250 million), 14.1 years overall. One year later, brands' average unit share was 18% for NMEs$250 million, 23% overall. Ninety-three percent of NMEs$250 million experiencing initial generic entry faced at least one Paragraph IV challenge (2019, three-year rolling average), an average of 6.0 years after brand launch (81% and 6.3 years for all NMEs). NMEs faced an average of 6.8 and 8.9 Paragraph IV challengers per NME, for all and NMEs$250 million, respectively (2017-19 figures).All analyses were restricted to NMEs experiencing generic entry.The average 2017-19 MEP of 13.0 years for NMEs$250 million has changed relatively little over the past decade and remains lower than for all NMEs (14.1 years). Paragraph IV challenges are more frequent and occur earlier for NMEs$250 million. Generic share erosion remains high for both NME types.

The extent of price variation across a local market has important implications for value-based purchasing. Using a new data set containing health care prices for nearly every insurer-provider-service triad across a large local market, we comprehensively examined variation in fee-for-service paid commercial prices in Massachusetts for 291 predominantly outpatient medical services. Prices varied considerably across hospital service areas. Prices for medical services at acute hospitals were, on average, 76 percent higher than at all other providers. The service categories with the widest price variation were ambulance/transportation services, physical/occupational therapy, and laboratory/pathology testing. In this market, simulations suggested that steering patients toward lower-price providers or setting price ceilings could generate potential savings of 9.0-12.8 percent. Marketwide price information at the insurer-provider-service level could help target policy interventions to reduce health care spending.

Background The South African pharmaceutical market, like many other low- and middle-income countries, has long been synonymous with high medicine prices. In response to this, the government had instituted several policies to improve medicine pricing transparency and to lower medicine prices. Importantly among the new policies was the introduction of the single exit price mechanism and provisions for the increased uptake of generic medicines. Despite some early successes, the increasing presence of pseudo-generics in the South African pharmaceutical market appears to be hindering the process. Objective This study sought to describe the price differentials among the originator, pseudo-generics, and true generics registered in South Africa in an effort to create consumer and prescriber awareness of this phenomenon. Methods Private-sector medicine prices for the originator, pseudo-generics, and true generics were sourced from the South African Medicine Price Registry. Results The study revealed that of most medicines with a true generic competitor (n = 10 of 14), the pseudo-generics were priced more than even the highest-priced generics. Conclusion The increasing presence of pseudo-generics in the South African pharma market warrants further oversight and consumer and prescriber awareness.

In 1993, when Bill Clinton was trying to sell his health reform legislation, he excoriated pharmaceutical manufacturers for high drug prices that forced “sick and elderly Americans to skip meals to...

It is unknown to what extent rising drug costs are due to inflation in the prices of existing drugs versus the entry of new products. We used pricing data from First Databank and pharmacy claims from UPMC Health Plan to quantify the contribution of new versus existing drugs to the changes in costs of oral and injectable drugs used in the outpatient setting in 2008-16. The costs of oral and injectable brand-name drugs increased annually by 9.2 percent and 15.1 percent, respectively, largely driven by existing drugs. For oral and injectable specialty drugs, costs increased 20.6 percent and 12.5 percent, respectively, with 71.1 percent and 52.4 percent of these increases attributable to new drugs. Costs of oral and injectable generics increased by 4.4 percent and 7.3 percent, respectively, driven by new drug entry. The rising costs of generic and specialty drugs were mostly driven by new product entry, whereas the rising costs of brand-name drugs were due to existing drug price inflation.

Recent increases in prices of longtime generic drugs have focused attention on competition in generic markets. We used Medicare Part D data for the period 2006-15 to examine sudden large price increases in generic drugs in the context of their base prices, duration, and accompanying changes in patients' out-of-pocket spending. The fraction of drugs that at least doubled in price increased from 1.00 percent of generic products in 2007 to 4.39 percent in 2013. Almost all were initially low- or medium-price medications and not among the most widely used generics. Changes in out-of-pocket spending for these drugs were modest. However, the elevated prices persisted for two to five years. Data for 2011-15 showed similar trends. Potential steps to ensure that generic markets remain strong include fast-tracking new generic drug applications when competition is limited, allowing temporary importation of off-patent drugs, and implementing greater oversight of drug company mergers and takeovers.

The pressures to maintain a low-carbon economy makes green competitiveness (GC) a significant issue in China. It has been found that the development of Internet and E-commerce contributes significantly to GC of regional economy, yet there are still lack of quantitative investigation on their effects, which can be used to further guide the economic development. Therefore, this study constructs a new evaluation index for the green competitiveness of the regional manufacturing industry in China by introducing Internet application indicators and E-commerce development indexes into its evaluation system. The results show Jiangxi and Gansu moved upward significantly in the GC ranking over the period. The development of the Internet and E-commerce has the most significant impact on GC of regional manufacturing. The lack of green manufacturing capabilities and green innovation drivers led to a decline in the GC ranking of Liaoning, Tianjin, Guangxi and Heilongjiang. Finally, this study uses Moran’s I index to investigate the spatial agglomeration effect of the green development of the manufacturing industry at the province level. The results show an increase in the GC of China’s regional manufacturing industry, and the GC of manufacturing industry shows a significant agglomeration effect. Based on the above conclusions, the proposal to promote the balanced development of the GC of the manufacturing industry is proposed.

Subcontractors depend heavily on their prime contractor and thus find it very risky to enter a new business on their own. This study proposes a framework for these subcontractors to develop blue ocean technologies related to their prime contractor. First, the primary technologies predicted to be promising are extracted from the business reports of the prime contractor. Sub-technologies are then selected through a patent-based search using keywords and International Patent Classification codes of the primary technologies. From them, blue ocean technologies are proposed by optimizing the weighted mean of the min-max normalized market value, degree of competition in the technology market, and subcontractors’ potential technological capabilities for each sub-technology. This study shows that subcontractors can enhance their technology competitiveness by finding a low-risk blue ocean technology. Our empirical research on the subcontractors of a semiconductor firm identified technological patent fields for them to pursue. From our framework, subcontractors can identify blue ocean technologies by considering their prime contractor’s future industrial areas and technologies of interest as well as their own technological capabilities. Furthermore, the prime contractors can gain the synergy effect of technology expansion through cooperation.

This study aims to make a critical review of provincial competitiveness index (PCI) in the Central Highlands of Vietnam. In this regard, the research examines relationships between PCI and the possible attraction of enterprises operating in the region, thereafter, proposes some policy recommendations to improve business environment in the region. The secondary dataset of PCI and enterprise were incorporate with primary data collected from qualitative methods to explore the effect of PCI on enterprise attraction. The results show that the enterprises which have been operating in the Central Highlands accounted for 2.2% of the total with invested capital and accounted for 1.1% of whole country in 2018. PCI highly correlates with the number of enterprises, the employees and the capital of enterprises. Consequently, in order to attract enterprises, local governments in the region need to improve sub-indexes thereby improving general PCI scores.

In the platform-based innovation ecosystem, the symbiotic evolution and interaction between the participating entities have drawn extensive attention. However, there is a lack of understanding of the co-specialization and co-innovation among members of the innovation ecosystem. This paper addresses this gap. In this paper, the collaborative innovation between a platform firm and different kinds of complementors, and its effects on the performance of the innovation ecosystem are simulated through an improved NK model. The result shows that the co-innovation performance between generalist complementors and the platform firm is generally outperformed than that between the specialist complementors and the platform firm. As the interdependencies between the complementary components get stronger, the innovation performance of the innovation ecosystem influenced by the interaction between different types of complementors and platform firms tend to be an inverted U-shape.

In this cohort study, pricing data from January 2007 to June 2018 from SSR Health were used to determine how list prices, net prices, and discounts for the originator biologics changed with biosimilar competition.

The excellent flavor of Wagyu is becoming increasingly popular all over the world. However, the popularity of Wagyu has encouraged competition for authentic Japanese Wagyu, resulting in the appearance of inauthentic Wagyu beef. To ward off this export competition, Japanese Wagyu producers need to improve and differentiate their value-added beef. As hardly any past studies focus on the consumption of Japanese Wagyu in Hong Kong, this paper uses a choice experiment to examine the valuation of beef by Hong Kong consumers in terms of country of origin. Data from 250 Hong Kong consumers obtained through a web questionnaire were used to analyze the beef preferences. In addition to the beef's country of origin, its marbling level, the Japanese Wagyu label and reference point effects were considered. The results indicate that Hong Kong consumers place a significant premium on Japanese Wagyu over Australian or American Wagyu. That premium is greater among consumers who have seen the Japanese Wagyu label. Reference price effects were also statistically confirmed. To promote Japanese Wagyu beef consumption, therefore, it is important to make the consumer aware of the advantages of Japanese Wagyu.

Background Since 2011, drug market participants have traded illegal drugs through cryptomarkets, a user-friendly infrastructure in which drug market participants can conduct business transactions. This study assesses market competition and the size and scope of drug vendors' activities on one of the largest cryptomarkets, AlphaBay, in order to better understand the challenges that drug vendors face when selling on this venue. Methods Relying on data collected from AlphaBay, we calculate the degree of competition within the drug market using the Herfindhal-Hirshmann Index (HHI). We then follow a micro analytical approach and assess the size and scope of vendors' accounts. This is done by evaluating each vendor's market share over time using a group-based trajectory model (GBTM). Results from the GBTM are then used to assess vendors' exposure, diversity and experience based on their selling position in the market. Results The HHI scores demonstrate that cryptomarkets offer a highly competitive environment that fits in a top-heavy market structure. However, the distribution of vendors' market share trajectories shows that only a small portion of vendors (referred to as high-level vendors) succeed in generating regular sales, whereas the majority of vendors are relegated to being mere market spectators with almost zero sales. This inequality is exacerbated by the aggressive advertising of high-level vendors who post many listings. Overall, product diversity and experience is limited for all market participants regardless of their level of success. We interpret these results through Reuter's work on traditional illegal markets, e-commerce studies and the growing field of cryptomarket research. Conclusion We conclude that, while offering a new venue for illegal drug transactions, in many ways, the economics of cryptomarkets for drug dealing are consistent with Reuter's classic assessment of illegal markets and the consequences of product illegality that underlie it. Cryptomarkets conflicting features, a relatively open setting with relatively high barriers to entry and sales, shape the competitive, yet top-heavy market that emerges from our analysis. This creates a challenging environment for cryptomarket drug dealers.

Background Drug price setting is one of the key challenges faced by the Japanese health care system. This study aims to identify the determinants of drug price in Japan using the example of the rheumatoid arthritis (RA) treatment market. Research design and methods In order to compare prices across different products, we calculated prices per defined daily dose using WHO methodology. Price determinants were calculated both at launch and over time using IMS quarterly data on medicines approved for RA treatment in Japan from 2012 to 2015. Pharmaceutical pricing was modeled as a function of clinical and economic variables using regression analysis. Results For prices at the launch we found that differences in efficacy are not reflected in price differentials. We also report that the number of products within a molecule class had a negative effect on prices while originator drugs maintained higher prices. Conclusion Although the existing pricing rules in Japan are very comprehensive they do not necessarily capture differences in product characteristics. The findings here support the notion that competitive forces are weak in highly regulated markets such as Japan.

Nowadays, the idea of firms’ atomization is rejected and companies are perceived as entities embedded in inter-organizational relationships and their configurations, including dyads and networks. The relational view in strategic management thus prompts research on a firm’s relational strategy. This paper taps this gap considering links between strategic choices and attributes of a company’s inter-organizational relationships, as well as the outcomes achieved by collaboration with different groups of stakeholders. We test the model based on research carried out on a representative sample of 400 enterprises operating in Poland and on international markets. The results of structural equation modeling show that 1) the outcomes of collaboration reflect market benefits and are dependent on the durability of the inter-organizational relationships and the heterogeneity of the supply chain relationships, 2) durability as an attribute of the relational strategy depends on the choice of how to create and appropriate value, and 3) in turn, the attribute of heterogeneity of the relational strategy depends on what type of partners are selected. Thereby, we deliver managerial implications on how to create a relational strategy to achieve a relational rent and better a company’s market position.

Objective To examine the effects of hospital and insurer markets concentration on transaction prices for inpatient hospital services. Data Sources Measures of hospital and insurer markets concentration derived from American Hospital Association and HealthLeaders-InterStudy data are linked to 2005–2008 inpatient administrative data from Truven Health MarketScan Databases. Study Design Uses a reduced-form price equation, controlling for cost and demand shifters and accounting for possible endogeneity of market concentration using instrumental variables (IV) technique. Principal Findings The findings suggest that greater hospital concentration raises prices, whereas greater insurer concentration depresses prices. A hypothetical merger between two of five equally sized hospitals is estimated to increase hospital prices by about 9 percent (p

Agreement on Trade Related aspects of Intellectual Property Rights (TRIPS) was laid on the premises of rewarding monopolistic patent rights to the innovator. Stronger patent protection was advocated to promote technology transfer from developed nations to the rest of the world. To boost domestic innovative potential and to maintain trade ties, most developing countries signed the TRIPS agreement. Impact of patent laws in the pharmaceutical industry was crucial as it posed threat to access health. This paper aims to analyze the impact of pharmaceutical product patent laws incorporated under the TRIPS agreement using 65 countries panel dataset from 1995 to 2016. The data is empirically analyzed using negative binomial regression and Poisson regression. Results clearly indicate that the number of pharmaceutical patents filed in US Patent and Trademark Office (USPTO) has decreased after TRIPS compliance in both low and middle income countries. However, the decline is larger in upper middle and lower middle income countries than in low income countries. The phenomenon of low patent activity has an increasingly declining trend across low and middle income countries. Hence the claimed hypothesis that stronger patent rights would increase innovative potential does not seem to stand true, which raises serious affordability concerns of bringing patents in the pharmaceutical sector.

The current Medicare Part D benefit may require greater out-of-pocket spending for beneficiaries filling prescriptions for higher-price generic drugs, compared to those filling brand-name counterparts. This can occur among patients who reach the catastrophic coverage phase under the Part D benefit, when differences between the prices for generic and brand-name drugs are not large. This scenario may be common with specialty drugs (typically high-price products used to treat rare or complex conditions), when the number of generic manufacturers or clinical alternatives are limited. In this study we demonstrated that patients would pay more out of pocket for generic medications than for brand-name drugs in these cases, driven by manufacturer discounts provided in the Medicare Part D coverage gap. Overpayments for specialty generic drugs relative to brand-name drugs ranged from $869 to $1,072 in 2019, despite lower point-of-sale prices for these drugs. Policy makers should consider modifying the Part D benefit to increase incentives for generic drug use.

Proposals to contain health care costs often draw from 1 of 2 primary policy approaches—price regulation or market competition. These approaches are often viewed as in conflict, even though some health economists have long argued that they may be compatible, and desirable, given the unique characteristics of health care markets. Medicare Advantage (MA) markets provide a real-world example supporting the view that provider price regulation and insurance market competition can be complementary.

Evidence suggests that growth in providers' prices drives growth in health care spending on the privately insured. However, existing work has not systematically differentiated between the growth rate of hospital prices and that of physician prices. We analyzed growth in both types of prices for inpatient and hospital-based outpatient services using actual negotiated prices paid by insurers. We found that in the period 2007-14 hospital prices grew substantially faster than physician prices. For inpatient care, hospital prices grew 42 percent, while physician prices grew 18 percent. Similarly, for hospital-based outpatient care, hospital prices grew 25 percent, while physician prices grew 6 percent. A majority of the growth in payments for inpatient and hospital-based outpatient care was driven by growth in hospital prices, not physician prices. Our work suggests that efforts to reduce health care spending should be primarily focused on addressing growth in hospital rather than physician prices. Policy makers should consider a range of options to address hospital price growth, including antitrust enforcement, administered pricing, the use of reference pricing, and incentivizing referring physicians to make more cost-efficient referrals.

Finance research shows capital structure has an important effect on the product-market competitiveness of firms. Our paper documents an asymmetric effect of capital structure on firms' competitiveness in a sample of Chinese firms. Firms whose capital structure is characterized by a low leverage but rapid leverage growth has a dominant position in their product market. The industry average leverage ratio is also a critical factor influencing firms' competitiveness. High debt levels hinder firms' competitiveness. The influence of capital structure on firms' product-market competitiveness varies based on the extent of industry concentration. In highly concentrated industries, high leverage level and slow leverage growth suppress firms' competitiveness to a larger extent compared with industries with low concentration.