Association of authorized generic marketing with prescription drug spending on antidepressants from 2000 to 2011.

OBJECTIVES: Prior research suggests that authorized generic drugs increase competition and decrease prices, but little empirical evidence supports this conclusion. This study evaluated the impact of authorized generic marketing on brand and generic prices.

DESIGN: Longitudinal analysis of the household component of the Medical Expenditure Panel Survey.

SETTING: Interview panels over 12 years, with a new panel each year. For each panel, 5 rounds of household interviews were conducted over 30 months.

PATIENTS OR PARTICIPANTS: Nationally representative sample of the U.S. civilian noninstitutionalized population, focusing on people using 1 of 5 antidepressant drugs that became generically available between 2000 to 2011.

INTERVENTION: Drugs and dose/formulations with versus without an authorized generic drug marketed.

MAIN OUTCOME MEASURES: Multiple linear regression models with lagged variables evaluated the effect of an authorized generic on average inflation-adjusted brand and generic price, adjusting for payment sources, generic entry time, competitor price, and year.

RESULTS: During 2000-2011, annual brand antidepressant utilization decreased from 51.47 to 7.52 million prescriptions, and generic antidepressant utilization increased from 0 to 88.83 million prescriptions. Over time, payment per prescription for brand prescriptions increased 25% overall, and generic payments decreased 70% for all payer types. With unadjusted data, after generic entry the average brand price decreased $0.59 per year with and $3.62 per year without an authorized generic in the market. Average generic prices decreased $10.30 per year with and $8.47 per year without an authorized generic in the market. In multiple regression models with lagged variables adjusted for heteroscedasticity, payer source, time since generic entry, competitor price, and year, authorized generics significantly reduced average payment for generic (-$3.03) and brand (-$60.64) prescriptions, and over time this price change slowly diminished.

CONCLUSION: Availability of an authorized generic was associated with reduced average generic and brand price in the antidepressant market, supporting prior evidences.