Recent trends in brand-name and generic drug competition.

OBJECTIVE: To provide evidence on recent trends in: (1) market exclusivity periods (MEPs, the time between launch of a brand-name drug and its first generic competitor) for new molecular entities (NMEs); (2) the likelihood and timing of patent challenges under Paragraph IV of the Hatch-Waxman Act; and (3) generic drug penetration.

METHODS: IMS Health National Sales Perspectives data were used to calculate MEPs for the 257 NMEs experiencing initial generic entry between January 1995 and September 2012 and the number of generic competitors for 12 months afterwards, by level of annual sales prior to generic entry and time period. The likelihood and timing of Paragraph IV challenge were calculated using data from Abbreviated New Drug Approval (ANDA) approval letters, the FDA website, and public information searches to identify drugs experiencing Paragraph IV filings, and the first filing date.

RESULTS: For drugs experiencing initial generic entry in 2011-2012, the MEP was 12.6 years for drugs with sales greater than $100 million (in 2008 dollars) in the year prior to generic entry, 12.9 years overall. After generic entry, the brand rapidly lost sales, with average brand unit share of 16% at 1 year; 11% for NMEs with pre-generic entry sales of at least $250 million (in 2008 dollars). Over 80% of NMEs experiencing 2011-2012 initial generic entry had faced at least one Paragraph IV challenge from a generic manufacturer. These challenges were filed relatively early in the brand-name drug life cycle: within 7 years after brand launch, on average.

LIMITATIONS: Analyses, including Paragraph IV calculations, were restricted to NMEs where generic entry had occurred.

CONCLUSION: Pharmaceutical competition continues to evolve; while the average MEP below 13 years for 2011-2012 remains consistent with prior research, Paragraph IV challenges are increasingly frequent and occur earlier, and generic share erosion has intensified.