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Purpose: We study how capital requirements, intended as a measure to ensure security for the financial system, can create moral hazard for banks in dealing with distressed debts. Design/methodology/approach: Over the period spanning from 1993 to 2019, we manually gathered data on 1953 firms, identifying a total of 2,146 distress events, with 804 instances resulting in bankruptcy fillings. Findings: Our analyses at the loan level and the bank level consistently show that loans of distressed firms are much more likely to be extended when the lenders are closer to the capital requirement limit. Exploiting the discontinuity in the predetermined maturity date of loans, we provide causal evidence on the relationship between capital ratios and extension likelihood. Distressed loans that are due just before the report date (end of a quarter) are much more likely to be extended than loans due just after the report date, after controlling for loan and firm characteristics. Additional analyses show that the effects are stronger when external financing is more costly and when the banks are poorly capitalized. Originality/value: Our paper presents the first causal evidence of capital requirements on lending distortion, contributing to our understanding of the dynamics within the banking sector and providing policy implications for promoting financial stability and regulatory efficacy. [ABSTRACT FROM AUTHOR]

In this paper, we explore dynamic market share and public healthcare costs of trastuzumab's evergreening (subcutaneous) variant during introduction of trastuzumab's competitive biosimilar variants in the Netherlands. We used a time series design to assess dynamic market share of trastuzumab's evergreening variant after introducing trastuzumab's biosimilar variants, focusing on the number of treatments and patients. The public healthcare costs of this evergreening strategy were estimated using administrative claims data. Our results show that the original trastuzumab was completely replaced by the subcutaneous and biosimilar variants. The uptake of the subcutaneous form peaked at 50% market share but after the introduction of biosimilars progressively reduced to a market share of 20%, resulting in a more competitive market structure. The public healthcare costs for trastuzumab significantly decreased after the introduction of the biosimilars. After the introduction of the biosimilars, a substantial price drop is visible, with the subcutaneous version, still under patent, also falling sharply in price but less strongly than the iv/biosimilar version. As the costs are publicly funded, we recommend a more explicit societal debate to consider if the potential benefits of subcutaneous Herceptin® (and other similar medicines) are worth the additional costs, and at which price it should be reimbursed as the part of the benefit package. [ABSTRACT FROM AUTHOR]

This paper analyses the non-performing assets (NPA) crisis in the Indian banking system from the perspective of soft budget constraints. Using a panel dataset of 105 publicly listed firms, it explores the relationship between NPAs and bank lending behaviour, particularly examining credit rationing regarding firm size and risk level. The findings indicate that Indian banks favour large firms over smaller ones, while credit rationing is not adequately aligned with borrower riskiness. However, the Asset Quality Review (AQR) by the Reserve Bank of India and the introduction of the Insolvency and Bankruptcy Code (IBC) seem to have enforced risk-based lending to some extent. These results shed light on the systemic issues that drive NPAs, linking them to governance weaknesses and the prevalence of soft budget constraints.

This paper reviews the literature on zombie firms to provide a holistic view by delineating their formation, impact, widespread nature, prevention and policy implications. This paper uses a systematic literature review methodology, in which 76 papers published in journals ranked on the Australian Business Deans Council (ABDC) 2022 list were reviewed. The study period was from 2000 to 2022. Among the main findings, the widespread problems of zombie firms were evident. The authors found that consistent support, either in the form of government grants or a weak financial framework, was responsible for their formation. The suboptimal performance of factors of production, depressed job creation, low innovation and overall negative impact on economic activity are the consequences of zombification. This can be controlled by ensuring better bankruptcy codes, focused on government assistance, technology use and better due diligence by banks. This review serves as a reference point for future researchers as a cohesive and holistic study presenting a full picture of the problem, so that the proposed solutions are robust and tenable. This review is among the initial attempts to comprehensively study published work on zombie firms in terms of analyzing their region-specific nature, with an emphasis on definition, causes, impact and prevention.

We study innovation incentives under "product hopping," whereby an incumbent patents a minor modification of a pioneer drug (for example, a new delivery method) and promotes the modified version to shift demand from the original drug. We develop a model in which an incumbent races against an entrant to discover a drastic innovation. We show that product hopping can decrease the total research and development (R&D) investment for drastic innovation. Moreover, an incumbent only chooses to engage in product hopping when drastic innovation is sufficiently difficult. Although product hopping may boost ex-ante R&D for pioneer drugs, it comes at the expense of decreasing R&D for subsequent drastic innovations and consumer surplus through socially wasteful marketing expenses. Our results contribute to the policy debate on product hopping, welfare, and antitrust. [ABSTRACT FROM AUTHOR]

In the pharmaceutical sector, evergreening is considered a range of practices applied to extend monopoly protection on existing products. Filing several patent applications related to the same active pharmaceutical ingredient (API) is one of the most common manifestations of evergreening. During the COVID-19 pandemic, several health technologies were developed. This study aimed to analyze the extension of evergreening for selected health technologies for SARS-CoV-2 through patent filing strategies. Starting with the selection of three antivirals, one biological and two vaccines, a patent landscape was built based on public and private databases. Regarding these selected technologies, we analyzed some of the evergreening strategies used by different applicants, academic institutions or pharmaceutical companies and found a total of 29 applications (10 after the pandemic) for antivirals, 3 applications for a biological drug (1 after the pandemic), and 41 applications for vaccines (23 after the pandemic). Despite differences among the technologies, a common aspect found in all analyzed cases is the intense patent filing after the pandemic, aligned to the fact that those technologies were moving through the R&D process up to regulatory approval. The evergreening approach pursued has already been found in other diseases, with the risk of monopoly extension and also bringing legal uncertainty due to the lack of transparency of newer patent applications covering specific medical indications. Therefore, efforts to address evergreening should be pursued by countries, including the adoption of a public health approach to the patent examination of those technologies to prevent the granting of undeserved patents.

Evergreening consists of multiple ways that pharmaceutical companies extend patent protection and prolong profitability of brand name drugs past patent expiration. In psychotropic medications, these strategies do not necessarily make more effective drugs, and often increase drug prices, which can result in lower access and utilization. There has not been a systematic literature review of evergreening strategies for psychiatric medications. Based on such a review, 11 strategies were identified and relevant examples were provided. Four case examples of commonly used psychiatric medications indicated evergreen prices 3 to 211 times the cost of the original medication, and the evergreen costs ranging from $132.00 to $10,125.24 higher than the original cost on an annual basis. The higher cost of evergreening medications can create inefficiencies and waste in healthcare resulting in lower-quality patient care. Healthcare providers, patient advocates, health insurance companies, and policy-makers should be aware of these practices to improve healthcare systems. [ABSTRACT FROM AUTHOR]

Background: Branded drugs contribute disproportionately to high prescription drug spending. Pharmaceutical companies utilize patent extension "evergreening" techniques that contribute to high drug costs. Aims: This article describes various patent extension techniques and analyzes the tactic of combining generic drugs with branded drugs, using metformin combinations for diabetes treatment as a case study. It examines the argument that FDCs enhance adherence and compares the cost of several branded fixed‐dose combinations with the cost of their individual constituents. Materials & Methods: We reviewed literature on patent extension techniques in both medical and marketing literature, supplemented by our own extensive files. We performed a price analysis of several branded pharmaceuticals and generically available equivalents. Prescription drug prices were determined using GoodRx.com, and prices of over‐the‐counter products were established based on the prices of two chain wholesalers. Patent and formulation information was taken from the FDA Orange Book: Approved Drugs with Therapeutic Equivalence Evaluations database. Results: "Evergreening" patent extension tactics include the sequential release of different formulations, minor dosing changes, and fixed‐dose combinations (FDCs). A "new use" provides an opportunity for a company to re‐patent, rebrand, and remarket one drug for multiple indications. It is unclear whether or not FDCs enhance adherence. Branded fixed‐dose combinations generally cost far more than their individual constituents. FDCs that combine metformin with other drugs are an exception, often costing the same as the non‐metformin component. Discussion: Patent extension tactics increase drug costs while providing little additional benefit to patients. Minor alterations in formulations or dosing may provide no clinical benefits. Many FDCs are expensive and fail to provide cost‐justified improvements in clinical outcomes, compared to equivalent generic drugs that would save money while delivering an equal standard of care. Combining newer hypoglycemic drugs with metformin, a gold‐standard, generic, inexpensive drug, does not appear to cost more than individual constituents but offers no clinical advantage over metformin alone. Conclusion: Evergreening tactics should be reined in, as they represent significant cost to the healthcare system and to patients. Physicians and other prescribers should avoid prescribing FDCs, or slightly tweaked "new" drugs. Patented drug combinations generate profit without innovation. [ABSTRACT FROM AUTHOR]

The Food and Drug Administration (FDA) recently approved the first ever 'digital' drug, an antipsychotic (aripiprazole) embedded with a sensor (Abilify MyCite) that tracks data about drug ingestion as well as activity level and mood patterns. In this paper, we identify the financial and sociopolitical drivers that have facilitated the development and regulatory approval of a digital drug marketed for people with psychotic disorders. We explore the novel ways that such devices blur the distinctions between medication, machine and mind. The risks of digital aripiprazole obscuring and exacerbating the effects of social inequity are discussed. However, we also consider the possibility that this digital psychotropic drug may allow for new forms of personhood, performances of subjectivity, and resistance to emerge. This paper addresses both the conditions that enabled the development of digital aripiprazole as well as the possibilities and limitations it may bring to health providers and service-users. [ABSTRACT FROM AUTHOR]

We study pay-for-delay settlements between a patent-holder and a challenger when the patent-holder can introduce follow-on products. We show that ignoring follow-on products biases the inferred competitive harm of pay-for-delay settlements (the "Actavis inference"). The reason is that patent invalidation triggers an earlier introduction of follow-on products, which changes pay-for-delay negotiation payoffs. When follow-on products are ignored, we show that an inference based on a reverse payment over-estimates patent strength. If parties cannot use payments (as in pure-delay settlements), follow-on products may push the parties to settle on an earlier entry date, and litigation may arise in equilibrium. [ABSTRACT FROM AUTHOR]

In 2005, India amended its Patent Law to bring the country into compliance with the WTO TRIPS Agreement. Criticisms have arisen over a flexibility in the law, Section 3(d), which attempts to reduce evergreening by granting patents to only those inventions that enhance the drug's known efficacy. The lack of a clear definition in the law has raised worldwide concerns over its misuse which was exacerbated by the 2013 Supreme Court denial of Novartis's Appeal of Section 3(d)- based patent rejection for the cancer treatment drug, Glivec. To analyze the importance of Section 3(d) and this ruling on patent decisions in India, a database of 500 pharmaceutical patent cases between 2005 and 2016 was created. The determinants of patent decisions were estimated using a binomial logit regression and conducted a statistical analysis to identify their confounding factors. The results show that if a patent application has Section 3(d) objection, the odds of the case being rejected and/or abandoned more than double. Also, although the odds of patent rejections have fallen since the 2013 Supreme Court ruling, this result is driven by non-Section 3(d) cases. Thus, it was concluded that Section 3(d) will play an increasingly important role in patent rejections. [ABSTRACT FROM AUTHOR]

Patent as a rewarding system to the inventor has been in vogue for more than six hundred years. This has resulted in major innovations that have revolutionised our lives besides saving millions of lives and eradicating deadly diseases. But over the years the corporations rather than scientists or technocrats have become the claimants and owners of patents. In the process the balance between incentivisation and patenting for control has been lost and this has resulted in major questions on the objectives and functioning of the intellectual property rights regimes, particularly in the case of drugs and pharmaceuticals. In this paper the idea of value pluralism is used to develop an alternative perspective and it is illustrated with two case studies. It is contended that this approach is suitable for countries like India. It is important to explore the alternatives like Prizes, Open Source Drug Discovery and other ideas that seek to overcome the problems with the patent law and practice. Since patents on medical innovations is also an issue of access and affordability to life saving drugs, devices and treatments, a narrow view on patents and innovation is not sufficient. This paper examines the values and choices before the society and calls for a rethinking in our approach to invention and incentivisation. [ABSTRACT FROM AUTHOR]

Evergreening of pharmaceutical patents has emerged as a serious challenge for access to affordable drugs as it aims to delay the generic competition by extending the length of the exclusivity period beyond the legitimate patent term without any considerable improvement in therapeutic benefits of the already patented pharmaceutical drug. This paper endeavours to question the legitimacy of the evergreening of pharmaceutical patents. This study applies all the recognized theories in support of the patent system – namely the 'natural law' or 'natural rights' theory, the 'reward by monopoly' theory, the 'monopoly-profit incentive' theory, the 'exchange for secrets' theory or the 'contract' theory, and the 'prospect' theory – to the practice of evergreening of drug patents in order to check whether or not any of these theories can be used to justify the practice. The study concludes that the practice of evergreening is not consistent with any of these theories and therefore lacks any plausible justification. [ABSTRACT FROM AUTHOR]

In the pharmaceutical context, many Southern African Development Community (SADC) members grant patents on drugs without substantially reviewing applications first, thus routinely granting patents for new versions of old medicines, thus extending patent life beyond the normal 20-year period. In contrast, Brazil and India, homes to major generic drug manufacturers in the BRICS grouping, examine each application before a patent is granted. It has been argued by health activists and academics that excessive patenting results in too many patents for minor innovations in medical technology and this in turn leads to higher prices of medicines, thus frustrating SADC citizens' right to access affordable essential medicines. This paper highlights how the legislative inclusion of World Trade Organisation (WTO) Trade Related Aspects of Intellectual Property Rights (TRIPS) flexibilities around the requirements for patentability can be effectively used to curb incremental patenting and limit the proliferation of evergreen patents. This is achieved through a critical analysis the 2013 Supreme Court of India case of Novartis AG v Union of India before extracting useful lessons for the SADC. The highlighted lessons will in all likelihood inform the current intellectual law reform projects in most SADC members, including South Africa.

Presenting the first comprehensive study of evergreening, this article examines the extent to which evergreening behavior—which can be defined as artificially extending the protection cliff—may contribute to the problem. The author analyses all drugs on the market between 2005 and 2015, combing through 60,000 data points to examine every instance in which a company added a new patent or exclusivity. The results show a startling departure from the classic conceptualization of intellectual property protection for pharmaceuticals. Rather than creating new medicines, pharmaceutical companies are largely recycling and repurposing old ones. Specifically, 78% of the drugs associated with new patents were not new drugs, but existing ones, and extending protection is particularly pronounced among blockbuster drugs. Once companies start down the road of extending protection, they show a tendency to return to the well, with the majority adding more than one extension and 50% becoming serial offenders. The problem is growing across time. [ABSTRACT FROM AUTHOR]

Employing data on publicly listed firms for 1995-2012, the article examines the behaviour of bank lending and interest cost and how it evolved during the crisis. The evidence suggests that high-Non-performing Loans (NPL) main banks raised their lending and lowered lending rates during the crisis, especially to risky, low-profit firms, indicative of a flight from quality. A disaggregation of the possible reasons for the flight from quality provides evidence in favour of short-termism behaviour by banks. The analysis also provides evidence in support of tunnelling by risky firms, which became amplified during the crisis. The net effect of these developments was a perceptible reduction in overall employment. [ABSTRACT FROM AUTHOR]

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Section 3(d) of India’s Patents Act forbids patents on pharmaceutical substances that do not demonstrate a significantly enhanced efficacy over and above prior known substances. This article discusses the long and tortuous history of the provision. Only after an extended period of difficulty did India get to grips with World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and interpret it strategically to benefit the nation and its industry. This sophistication reached a near crescendo with the emergence of section 3(d), its crude drafting notwithstanding. India’s efforts to tailor its patent regime to promote the national interest whilst remaining compliant with TRIPS stands in stark contrast to a number of other countries that have simply toed the line of the developed world’s maximalist intellectual property (IP) agenda. As such, it represents a significant milestone and a valuable lesson in the IP and development debates. [ABSTRACT FROM AUTHOR]

Introduction: Citalopram and escitalopram are among the most used medications and are key treatments for many psychiatric disorders. Previous findings suggest citalopram and escitalopram prescription rates are changing because of the patent for citalopram ending as opposed to evidence of a clear therapeutic advantage, which is called evergreening. This retrospective study focuses on characterizing the chronologic and geographic variation in the use of citalopram and escitalopram among US Medicaid and Medicare patients. We hypothesized that prescription rates of citalopram will decrease with a concurrent increase in escitalopram, consistent with evergreening., Methods: Citalopram and escitalopram prescription rates and costs per state were obtained from the Medicaid State Drug Utilization Database and Medicare Provider Utilization and Payment Data. Annual prescription rates outside a 95% confidence interval were considered significantly different from the average., Results: Overall, a decreasing trend for citalopram and an increasing trend for escitalopram prescription rates were noted in both Medicare and Medicaid patients. Cost differences between generic and brand were noted for both drugs, with generic forms being cheaper compared to the brand-name version., Discussion: Despite limited evidence suggesting that citalopram and escitalopram have any meaningful differences in therapeutic or adverse effects, there exists a noticeable decline in the use of citalopram that cooccurred with an increase in escitalopram prescribing, consistent with our hypothesis. Moreover, among these general pharmacoepidemiologic trends exists significant geographic variability. There was disproportionate spending (relative to their use) on the brand versions of these medicines compared to their generic forms.

'Evergreening' is a strategy wherein an innovative pharmaceutical firm introduces an upgrade of its current product when the patent on this product expires. The upgrade is introduced with a new patent and is designed to counter competition from generic manufacturers that seek to imitate the firm's existing product. However, this process is fraught with uncertainty because the upgrade is subject to stringent guidelines and faces approval risk. Thus, an incumbent firm has to make an upfront production capacity investment without clarity on whether the upgrade will reach the market. This uncertainty may also affect the capacity investment of a competing manufacturer who introduces a generic version of the incumbent's existing product but whose market demand depends on the success or failure of the upgrade. We analyze a game where capacity investment occurs before uncertainty resolution and firms compete on prices thereafter. Capacity considerations that arise due to demand uncertainty introduce new factors into the evergreening decision. Equilibrium analysis reveals that the upgrade's estimated approval probability needs to exceed a threshold for the incumbent to invest in evergreening. This threshold for evergreening increases as the intensity of competition in the generic market increases. If evergreening is optimal, the incumbent's capacity investment is either decreasing or nonmonotonic with respect to low end market competition depending on whether the level of product improvement in the upgrade is low or high. If the entrant faces a capacity constraint, then the probability threshold for evergreening is higher than the case where the entrant is not capacity constrained. Finally, by incorporating the risk-return trade-off that the incumbent faces in terms of the level of product improvement versus the upgrade success probability, we can characterize policy for a regulator. We show that the introduction of capacity considerations may maximize market coverage and/or social surplus at incremental levels of product improvement in the upgrade. This is contrary to the prevalent view of regulators who seek to curtail evergreening involving incremental product improvement. © 2016 Wiley Periodicals, Inc. Naval Research Logistics 63: 71-89, 2016 [ABSTRACT FROM AUTHOR]

The flexibilities introduced in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement were aimed at providing the developing countries with the option to adopt suitable measures to address access to patent-protected pharmaceutical products. The flexibilities include the grant of compulsory licences, exceptions to the exclusive right conferred by patent, allowing for parallel imports, and defining the criteria of patentability to achieve the goal of public health. While these flexibilities are available to all developing countries, only a few have implemented the flexibilities into their patent legislation. This paper examines the TRIPS compliant patent laws introduced in Brazil in the post-TRIPS era. It will be argued that the TRIPS Agreement was implemented too soon in Brazil, and the TRIPS flexibilities, although available had not been fully utilised due to pressure from transnational pharmaceutical corporations backed by developed countries, fear of exclusion from major trading blocs, and also due to a gap in the knowledge economy. It will also be argued that the World Trade Organization did not create a level playing field in the TRIPS negotiation in the lead up to the entry into force of the Agreement in 1995, which effectively handed over the advantage to the developed countries, thereby creating a two-tier system in the intellectual property rights arena and making it impossible for developing countries and least-developed countries to achieve the objective of access to affordable medicines. [ABSTRACT FROM AUTHOR]

India's trade-related aspects of Intellectual Property Rights (TRIPS) compliant Patent (Amendment) Act 2005 saw the transformation of its laws from a process patent regime to a product patent regime. The amendments have had a direct impact on India's generic drugs manufacturing sector, which was developed through the process patent regime introduced under the 1970 Act. The knock-on effect will soon be felt both domestically and globally, as a number of developing countries have come to rely strongly on Indian generics. This article seeks to study the effectiveness of the Act of 2005, and if it can be seen as an instance of success of the TRIPS provisions in Articles 7 and 8 read along with the Doha Declaration. It will be queried if developing countries in the World Trade Organization can possibly benefit from the model set-up by India for the issuance of compulsory licenses, and to check the practice of ‘evergreening’ by pharmaceutical patent holders. Recent decisions from the Indian judiciary and the quasi-judicial authorities, along with the procedures and policies put in place will be used to carry out the study. [ABSTRACT FROM AUTHOR]