Therapeutic substitution post-patent expiry: the cases of ACE inhibitors and proton pump inhibitors

Explaining why increases in generic use outpace decreases in brand name medicine use in multisource markets and the role of regulation

BACKGROUND

Healthcare systems worldwide face escalating pharmaceutical expenditures despite interventions targeting pricing and generic substitution. Existing studies often overlook unwarranted volume increases in multisource markets due to differential physician perceptions of brand name and generics.

OBJECTIVE

This study aims to explain the outpacing of generic medicine use over brand name use in multisource markets and assess the regulatory role, specifically examining the impact of reference pricing on volume and intensity increases.

METHODS

Analyzing German multisource prescription medicine markets from 2011 to 2014, we evaluate regulatory mechanisms and explore whether brand name and generic medicines constitute separate market segments. Using an Oaxaca-Blinder decomposition approach, we divide the differential in brand name versus generic medicine use rates into market structure and unobserved segment effects.

RESULTS

Generic use rates surpass same-market brand name substitution by 3.87 prescriptions per physician and medicine, on average. Reference pricing mitigated volume increase, treatment intensity and expenditure. Disparities in quantity and expenditure dynamics between brand name and generic segments are partially explained by market structure and segment effects.

CONCLUSION

Generic medicine use effectively reduces expenditures but contributes to increased net prescription rates. Reference pricing may control medicine use, but divergent physician perceptions of brand name and generics, revealed by identified segment effects, call for nuanced policy interventions.

The role of patient organisations in research and development: Evidence from rare diseases

Patient organisations play an increasingly crucial role in the pharmaceutical sector, yet their impact on innovation remains unexplored. We estimate the impact of patient organisations on R&D activity in the context of rare diseases in Europe using a proprietary dataset that maps clinical trials from discovery to phase III across 29 countries, 1893 indications, and 30 years (1990-2019). By applying difference-in-differences and event study methodologies to a panel of 1,646,910 unique R&D observations, we find that country-indication pairs with at least one operating patient organisation have a higher rate of R&D activity compared to those without, with stronger effect in more prevalent rare diseases compared to ultra-rare conditions. We observe a lag in effects from patient organisation introduction, suggesting it takes approximately five years for these organisations to affect R&D activity. Overall, our work suggests that patient organisations play an important role in steering R&D efforts in rare diseases. Further research is needed to better understand mechanisms driving this effect and the potential impact of patient organisations on existing health inequities.

The Utilization, Expenditure, and Price of Angiotensin-Converting Enzyme Inhibitors and Angiotensin Receptor Blockers in the US Medicaid Programs: Trends Over a 31 Year Period

BACKGROUND

Angiotensin-converting enzyme inhibitors (ACEIs) and angiotensin receptor blockers (ARBs) are used for several indications including hypertension. Our aim is to evaluate the utilization, expenditure, and drug price of ACEIs and ARBs in the US Medicaid population.

METHODS

A retrospective descriptive trend analysis was conducted using Medicaid State Drug Utilization outpatient pharmacy summary files managed by the Centers for Medicare and Medicaid Services from 1991 to 2021. Study drugs included ACEIs (e.g., captopril) and ARBs (e.g., losartan). Annual reimbursement and utilization were calculated for both classes. The average reimbursement per prescription was calculated as a proxy for drug prices. Market share competition between ACEIs and ARBs was analyzed over time.

RESULTS

ACEI and ARB utilization rose by 25% from 1991 to 2021. Brand ACEIs utilization peaked in 2002 with 28 million prescriptions while brand ARBs utilization continued to increase until 2005 with over 23 million prescriptions. However, generic products took the lead and exceeded brand ACEI and ARB utilization in 2006 and 2012 respectively. Medicaid spent over $ 33.7 billion on ACEIs and ARBs over 31-year. Brand ACEIs and ARBs average prices increased sharply to $8,104 and $6,908 respectively in 2021. The total prescription market share for ACEIs was 68% compared to 32% of ARBs over the entire study.

CONCLUSION

ACEIs and ARBs utilization increased over the last 31 years. Brand utilization switched over to generic resulting in less reimbursement. The average prices of brand ACEIs and ARBs continue to increase even after generics were introduced to the market.

Deregulation on branded and generic drugs price and its effect: a study of Chinese pharmaceutical market

Purpose

This research studies the effect of deregulation of price cap in pharmaceutical market. Price regulation (either through price cap or reference price) is common practice in the pharmaceutical market but recently there are increasing voices calling for deregulation claiming that deregulation could help in lowering drug price and increase revenue of pharmaceutical firms. Upon those callings, Chinese government removed the price cap regulation in June 2015. The author uses this natural policy experiment to study this effect.

Design/methodology/approach

In this study, the author applied the interrupted time series analysis (ITSA) on the revenue data of nine categories of both generic and branded drugs in China from March 2011 to August 2016 (the time frame includes both before and after of the initialization of the deregulation) and analyzed the effect of deregulation.

Findings

The results showed that, whether the revenue of drugs will increase or decrease after the deregulation of price cap depends on the level of competition and the change of patterns of the branded and generic drugs are different. When HHI (Herfindahl–Hirschman index) is sufficiently low (competition is high), revenue does not change as a result of deregulation, when HHI is moderately low (moderate competition), revenue from generic drugs will decrease significantly and revenue from branded drugs will increase significantly, and when HHI is high (low competition), revenue from generic drugs will increase significantly and revenue from branded drugs will decrease significantly.

Originality/value

This is a unique study with a unique data set. Most previous studies focus on regulation of drug price and analyze how this may affect drug revenue; however, this is a natural policy experiment of de-regulation. Moreover, previously most studies focus on reference pricing regulation and this is price-cap, a different mechanism that is rarely studied. The originality/value is high of this article.

The effects of drug safety warnings on drug sales and share prices

Current regulations require that when seeking approval for new drugs, pharmaceutical companies must demonstrate their short- but not long-term safety and efficacy. Instead, post-approval, clinicians report adverse reactions to regulators, who may issue additional safety warnings. We investigate the incentives this creates for pharmaceutical companies to seek approval for new drugs with unknown long-term effects. We first construct models predicting that (1) long-run effects can be reasonably approximated from observational follow-up of short-term randomized control trials, and (2) companies will trade-off short-term sales against possible later adverse demand effects. We then test whether regulator warnings over diabetic, analgesic, analeptic, or psychoanaleptic drugs sold in the US and UK hospital and retail sectors affect the sales of individual drugs or the share prices of companies that sell them. With some exceptions, we find that pharmaceutical companies generally face no adverse market reaction in sales or share price from newly issued warnings in these four drug categories.

Trends in drug revenue among major pharmaceutical companies: A 2010-2019 cohort study

BACKGROUND

Over the past 2 decades there has been a substantial increase in the number of new cancer medicines; this has been accompanied by a dramatic rise in drug costs. It is unknown how these trends impact the revenue of the pharmaceutical sector.

METHODS

Retrospective cohort study to characterize temporal trends of revenue generated from cancer medicines as a proportion of total drug revenue among 10 large pharmaceutical companies from 2010 to 2019. Itemized product-sales data publicly available through company websites or annual filings were used to identify annual drug revenue. Revenue data were adjusted for inflation and converted to 2019 US dollars.

RESULTS

During the study period, cumulative annual revenue generated from cancer drugs increased by 70%: from $55.8 billion to $95.1 billion, while cumulative revenue from nononcology drugs decreased 18%: from $342.2 billion to $281.5 billion. The proportion of total drug revenue generated from oncology drugs increased substantially over the study period: from 14% in 2010 to 25% in 2019 (τ = 1.0, P < .001).

CONCLUSIONS

Among 10 of the world's largest pharmaceutical companies, revenues generated from the sale of cancer drugs have increased by 70% over the past decade, while revenues from other medicines have decreased by 18%. Revenues from cancer drugs now account for one-quarter of the net revenues from these companies. Further work is needed to understand if this increase in sales revenue reflects industry profit, and to what extent increased spending has translated into improvements in patient and population outcomes.

Does NICE influence the adoption and uptake of generics in the UK?

The aim of this paper is to examine generic competition in the UK, with a special focus on the role of Health Technology Assessment (HTA) on generic market entry and diffusion. In the UK, where no direct price regulation on pharmaceuticals exists, HTA has a leading role for recommending the use of medicines providing a non-regulatory aspect that may influence the dynamics in the generic market. The paper focuses on the role of Technology Appraisals issued by the National Institute for Health and Care Excellence (NICE). We follow a two-step approach. First, we examine the probability of generic entry. Second, conditional on generic entry, we examine the determinants of generic market share. We use data from IQVIA British Pharmaceutical Index (BPI) for the primary care market for 60 products that lost patent between 2003 and 2012. Our results suggest that market size remains one of the main drivers of generic entry. After controlling for market size, intermolecular substitution and difficulty of manufacturing increase the likelihood of generic entry. After generic entry, our estimates suggest that generic market share is highly state dependent. Our findings also suggest that while NICE recommendations do influence generic uptake, there is only marginal evidence they affect generic entry.

Does the Patent Linkage System Prolong Effective Market Exclusivity? Recent Evidence From the Korea-U.S. Free Trade Agreement in Korea

This study evaluated the effect of the patent linkage system, fully introduced by the Korea-U.S. Free Trade Agreement in 2015, on patent challenges and the effective market exclusivity of new medicines in Korea. We used pharmaceutical approval data and pharmaceutical litigation data to detect new medicines and their counterparts, to collect patent challenges against new medicines, and to calculate effective market exclusivity for new medicines. Then, a nonparametric event history model was applied to statistically explain the duration of the market exclusivity of new medicines. Between 2007 and 2011, a total of 94 new medicines, consisting of 82 new chemical entities and 12 new biologics, were approved. The patent linkage system encouraged patent litigations to occur sooner, with a race to challenge the patents by various generic applicants. However, it was difficult to conclude that patent challenges had a significant impact on the prolongation of effective market exclusivity. The patent linkage system had a neutral effect on the effective market exclusivity of new medicines and encouraged patent challenges without abbreviating effective market exclusivity. In addition, this study highlights an important issue regarding biologics that has not been the subject of market competition, even for patent challenges.

Anticoagulant plus antiplatelet therapy for atrial fibrillation : Cost-utility of combination therapy with non-vitamin K oral anticoagulants vs. warfarin

BACKGROUND

Emerging evidence indicates combination therapy with anticoagulants and antiplatelet agents for atrial fibrillation (AF) will be increasingly required. Numerous studies compare the efficacy and cost-effectiveness of anticoagulation alone in AF, i. e., non-vitamin K oral anticoagulants (NOACs) vs. warfarin. However, the addition of antiplatelet agents with their potential for decreasing thromboembolic stroke counter-balanced by an increased bleeding risk has received less attention. Thus, we evaluated the cost-utility of this combination therapy.

METHOD AND RESULTS

We obtained event estimates from our recent meta-analysis of four randomized clinical trials designed to compare NOACs with warfarin in patients with AF. We examined patient subgroups within each trial that received antiplatelet therapy in addition to anticoagulation. Utilities were derived from the literature and cost estimates from the German health-care system. A decision tree was constructed and populated with these parameters. We used a 1-year time horizon because combination therapy is not recommended beyond this time. We calculated the incremental cost-effectiveness ratio (ICER) per quality-adjusted life-year (QALY). The derived ICER was 13,168.50 € per QALY. NOAC prices exerted considerable influence on the calculation. Nevertheless, there is potential for ICER shifts in favor of warfarin, e.g., if warfarin-mediated anticoagulation control is improved and thereby adverse events decrease. Conversely, if NOAC adherence decreases, adverse events could increase.

CONCLUSION

The derived ICER was 13,168.50 € per QALY, consistent with NOACs being cost-effective vs. warfarin when anticoagulation is used with antiplatelet agents. Nevertheless, country-, practice-, and patient-related factors influence the ICER. Our cost-utility calculation should be used a starting point for decision-making.

The diffusion of generics after patent expiry in Germany

To identify the influences on the diffusion of generics after patent expiry, we analyzed 65 generic entries using prescription data of a large German sickness fund between 2007 and 2012 in a sales model. According to theory, several elements are responsible for technology diffusion: (1) time reflecting the rate of adaption within the social system, (2) communication channels, and (3) the degree of incremental innovation, e.g., the modifications of existing active ingredient's strength. We investigated diffusion in two ways: (1) generic market share (percentage of generic prescriptions of all prescriptions of a substance) and, (2) generic sales quantity (number of units sold) over time. We specified mixed regression models. Generic diffusion takes considerable time. An average generic market share of about 75 % was achieved not until 48 months. There was a positive effect of time since generic entry on generic market share (p < 0.001) and sales (p < 0.001). Variables describing the communication channels and the degree of innovation influenced generic market share (mostly p < 0.001), but not generic sales quantity. Market structure, e.g., the number of generic manufacturers (p < 0.001) and prices influenced both generic market share and sales. Imperfections in generic uptake through informational cascades seem to be largely present. Third-party payers could enhance means to promote generic diffusion to amplify savings through generic entry.

Price difference as a predictor of the selection between brand name and generic statins in Japan

OBJECTIVES

This study aimed to explore the predictors of the selection between brand name drug (BR) and generic drug (GE) and to clarify the quantitative relationship about selection.

METHODS

We identified "incident users" who dispensed statins between April 2008 and June 2011 in commercially databases consisted of dispensing claims databases (DCD) of out-of-hospital pharmacies and hospital claims databases (HCD) of in-house pharmacies in Japan. Predictors of the selection between BR and GE, including price difference (PD), the price of BR, their interaction and percent change of the price of GE relative to BR were explored by logistic regression using DCD and HCD separately.

RESULTS

We extracted records of 670 patients who have opportunity for selection both BR and GE. Logistic regression analysis demonstrated that PD, the price of BR, interaction between them, and prescriber affiliation were factors significantly associated with the selection in the DCD; logit (p)=9.735-0.251×PD-0.071×the price of BR+0.002×PD×the price of BR-1.816×affiliation+0.220×gender-0.008×age+0.038×monthly medical fee. PD was inversely proportional to BR choice in DCD and lead to the opposite result in HCD. Numerical simulation of selection revealed that the quantitative relationships heavily depend on situations.

CONCLUSIONS

PD and the price of BR are predictors of the selection between BR and GE interactively in out-of-hospital pharmacies, but not in in-house pharmacies of medical facilities. Results may support policies which increase the power of out-of-hospital pharmacies for selection.

Measuring performance in off-patent drug markets: a methodological framework and empirical evidence from twelve EU Member States

This paper develops a methodological framework to help evaluate the performance of generic pharmaceutical policies post-patent expiry or after loss of exclusivity in non-tendering settings, comprising five indicators (generic availability, time delay to and speed of generic entry, number of generic competitors, price developments, and generic volume share evolution) and proposes a series of metrics to evaluate performance. The paper subsequently tests this framework across twelve EU Member States (MS) by using IMS data on 101 patent expired molecules over the 1998-2010 period. Results indicate that significant variation exists in generic market entry, price competition and generic penetration across the study countries. Size of a geographical market is not a predictor of generic market entry intensity or price decline. Regardless of geographic or product market size, many off patent molecules lack generic competitors two years after loss of exclusivity. The ranges in each of the five proposed indicators suggest, first, that there are numerous factors--including institutional ones--contributing to the success of generic entry, price decline and market penetration and, second, MS should seek a combination of supply and demand-side policies in order to maximise cost-savings from generics. Overall, there seems to be considerable potential for faster generic entry, uptake and greater generic competition, particularly for molecules at the lower end of the market.