Evaluating Recent Policies to Accelerate Generic Drug Entry

Abstract

Generic drugs can bring more competition to the market and help to reduce drug costs. Governmental pharmaceutical regulations operate to balance innovation, access, and cost. Encouraging more generic entries is one mechanism to provide more competition. In this dissertation, we examined several recent policies that aim at accelerating generic drug entry. In Chapter 1, we presented a brief introduction about the background and rationale for the research. In Chapter 2, we evaluated whether the enactment of the Generic Drug User Fee Amendments (GDUFA) has already led to an increase in the speed of entry for different orders of entrants. In Chapter 3, we utilized both existing literature and nationally representative survey data to deepen our understanding of the changes in drug price and volume associated with more generic competition. In Chapter 4, we seek to estimate the potential economic impact from future policy to encourage faster generic entry, combining evidence of market dynamic changes from Chapter 3 as well as hazard of entry modeled in Chapter 2. Through the policy analysis in Chapter 2, we found that in markets where the first generic entered with patent challenge, GDFUA slowed the time-to-entry for the second entrant, but its impact was not significant for subsequent entries. GDUFA had null impact on the time-to-entry for the first generics that entered without patent challenge but significantly slowed down time to some of the subsequent generic entries. Our results suggest that GDUFA may have decelerated generic entries in the market beyond the first entry. Therefore, the overall price impact of this policy remains unclear. Future evaluation should combine the joint effect of GDUFA with future policies that specifically aim to accelerate subsequent generic entries. In Chapter 3, through meta-analysis, we found that more generic drug competition is associated with decreasing generic drug price, but not branded drug price, a finding known as the generic competition paradox. The Bayesian linear regression analysis found price reduction post-generic entry exists for both generic and branded drugs. It also revealed that generic market share and overall drug volume increase with respect to more generic competition. Lastly, in Chapter 4, we quantified the potential benefit from accelerating the approval of the first three generic entrants. Increased competition has minimum impact on drug expenditure reduction. This indicates that a general policy to expediate the review for the first three generics may not be as useful for expenditure reduction, as the total number of generic entrants is not affected.