[e-drug] Innovator Pharma companies with Generic manufacturing business (5)

["Chan Park" <chan.park@lawyerscollective.org>]

E-DRUG:  Innovator Pharma companies with Generic manufacturing business (5)
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Dear Bonface,

I presume the meeting that you are talking about below is the UNDP meeting
in Pretoria during which we were discussing the issue of "authorized"
generics?  We had raised this issue not as a blanket condemnation of
originator companies entering into the generics market, but only in the
context of the possible anticompetitive effects that may arise when
originator companies "game" the system to discourage "true" generic
competition by launching an "authorized" generic version (e.g., through its
generic subsidiary).  

Such a practice can be harmful particularly within the context of the
legislative scheme in the U.S., where the law provides for a 6-month market
exclusivity to the first generic entrant.  This exclusivity period was
designed to provide an incentive for generic companies quickly to enter the
market with lower cost versions, and in the process to challenge any
questionable patents pertaining to the drug.  Now, when the originator
company allows an "authorized" generic to be launched during this
exclusivity period, the incentive for "true" generic companies to face the
risk of protracted patent litigation is substantially diminished, with
possible anticompetitive effects.  Although this particular use of
authorized generics is somewhat peculiar to the U.S. legislative framework,
it is nevertheless possible that this strategy could be adapted to other
situations with similar effect.  

For a more detailed account of the potential harmful effects of authorized
generics, see the US Generic Pharmaceutical Association's submission to the
Federal Trade Commission on this topic.  It is available at:

http://www.ftc.gov/os/comments/genericdrugstudy3/062806gpha.pdf

Warm regards,

Chan
"Chan Park" <chan.park@lawyerscollective.org>