Parallel Imports and Mandatory Substitution Reform - A Kick or A Muff for Price Competition in Pharmaceuticals?

What has been the effect of competition from parallel imports on prices of locally-sourced on-patent drugs? Did the 2002 Swedish mandatory substitution reform increase this competition? To answer these questions, we carried out difference-in-differences estimation on monthly data for a panel of all on-patent prescription drugs sold in Sweden during the 40 months from January 2001 through April 2004. On average, facing competition from parallel imports caused a 15-17% fall in price. While the reform increased the effect of competition from parallel imports, it was only by 0.9%. The reform, however, did increase the effect of therapeutic competition by 1.6%.parallel imports; pharmaceutical drugs; price competition; reference pricing; therapeutic competition

Parallel Imports and Mandatory Substitution Reform - A Kick or A Muff for Price Competition in Pharmaceuticals?

What has been the effect of competition from parallel imports on prices of locally-sourced onpatent drugs? Did the 2002 Swedish mandatory substitution reform increase this competition? To answer these questions, we carried out difference-in-differences estimation on monthly data for a panel of all on-patent prescription drugs sold in Sweden during the 40 months from January 2001 through April 2004. On average, facing competition from parallel imports caused a 15-17% fall in price. While the reform increased the effect of competition from parallel imports, it was only by 0.9%. The reform, however, did increase the effect of therapeutic competition by 1.6%.parallel imports; pharmaceutical drugs; price competition; reference pricing; therapeutic competition

Reference Pricing of Pharmaceuticals

We consider a therapeutic market with potentially three pharmaceutical firms. Two of the firms offer horizontally differentiated brand-name drugs. One of the brand-name drugs is a new treatment under patent protection that will be introduced if the profits are sufficient to cover the entry costs. The other brand-name drug has already lost its patent and faces competition from a third firm offering a generic version perceived to be of lower quality. This model allows us to compare generic reference pricing (GRP), therapeutic reference pricing (TRP), and no reference pricing (NRP). We show that competition is strongest under TRP, resulting in the lowest drug prices (and medical expenditures). However, TRP also provides the lowest profits to the patent-holding firm, making entry of the new drug treatment least likely. Surprisingly, we find that GRP distorts drug choices most, exposing patients to higher health risks.pharmaceuticals, reference pricing, product differentiation

The Dual Effects of Intellectual Property Regulations: Within- and Between- Patent Competition in the US Pharmaceuticals Industry

A patent only protects an innovator from others producing the same product, but it does not protect him from others producing better products under new patents. Therefore, one may divide up the source of competition facing an innovator into within-patent competition, which results from production of the same product, and betweenpatent competition, which results from production of products on other patents. Previous theoretical and empirical micro -based analyses have emphasized the effects of intellectual property regulations on within -patent competition by showing how protecting innovative returns from imitators raises R&D incentives. However, between-patent competition affects innovative returns, particularly through creative destruction in the many high-tech industries that seem central to overall economic progress. This suggests that a fuller understanding of IP-regulations take into account its effects on between-patent competition. We find that the total effects of intellectual property regulations depend heavily on whether these unexplored effects are present. We attempt to estimate the relative magnitudes of the two sources of competition in limiting innovative returns in the U.S. pharmaceuticals market. In this market within -patent competition from so-called generic producers has been analyzed relatively more compared to competition between-patents through so called therapeutic competition. We estimate that between-patent competition, most of which occurs while a drug is under patent, costs the innovator at least as much as within-patent competition, which cannot occur until a drug is off patent. The reduction in the present discounted value of the innovator's return from between-patent competition appears to be at least as large as the reduction from competition within -patents, and may be much larger.

Does Regulation Drive Out Competition in Pharmaceutical Markets?*

Most countries regulate pharmaceutical prices, either directly or indirectly, on the assumption that competition is at best weak in this industry. This paper tests the hypothesis that regulation of manufacturer prices and retail pharmacy margins undermines price competition. We use data from seven countries for 1992 to examine price competition between generic competitors (different manufacturers of the same compound) and therapeutic substitutes (similar compounds) under different regulatory regimes. We find that price competition between generic competitors is significant in unregulated or less regulated markets (United States, United Kingdom, Canada, and Germany) but that regulation undermines generic competition in strict regulatory systems (France, Italy, and Japan). Regulation of retail pharmacy further constrains competition in France, Germany, and Italy. Regulation thus undermines the potential for significant savings on off‐patent drugs, which account for a large and growing share of drug expenditures. Evidence of competition between therapeutic substitutes is less conclusive owing to data limitations

Sports foods and dietary supplements for optimal function and performance enhancement in track and field athletes

Numerous nutritional products are marketed with claims of optimizing athlete health and function and/or enhancing performance. Products that fall under the banner of “Sports Foods” or “Dietary Supplements,” may be used to support performance during training and competition or for enhancing aspects of training adaptation, recovery, immune function, and/or overall athlete health. Effective marketing campaigns and athlete endorsements may convince us that certain sports foods and supplements are fundamental in allowing athletes to reach their sporting goals. However, this approach is naive in understanding the true foundations of athlete success, such as the inherent genetic predisposition for athletic characteristics, the many hours of well-structured/periodized training, appropriate underlying nutrition, adequate sleep and recovery, and of course, good overall physical and mental health. Nevertheless, if these variables are all accounted for, there may be a role for sports foods and dietary supplements in an athlete’s training and competition routine, particularly within elite sport where marginal performance gains are pursued. The following review presents general considerations for track-and-field athletes using sports foods and dietary supplements to enhance performance, in addition to exploring the potential therapeutic/prophylactic use of these nutritional aids

Authorized Generic Entry prior to Patent Expiry: Reassessing Incentives for Independent Generic Entry

Patent holders frequently attempt to mitigate the loss of monopoly power by authorizing generic entry prior to patent expiry (early entry). Competition in off-patent pharmaceutical markets may be adversely affected if early entry substantially impairs the attractiveness of subsequent market entry. I examine generic entry decisions made in the course of recent patent expiries to quantify the impact of early entry on incentives for generic entry. Using unique micro data and accounting for the endogeneity of early entry, I estimate recursive bivariate probit models of entry. Drug markets' pre-entry revenues largely determine both independent generic entry and early entry decisions. Early entry in turn has no significant impact on the likelihood of generic entry. Original drug producers appear to authorize generic entry prior to loss of exclusivity primarily fueled by rent-seeking rather than strategic entry-deterrence motives

Prices of medicines: a case-study on the impact of the rate-of-return regulation in the United Kingdom

[eng] This work carries out an empirical evaluation of the impact of the main mechanism for regulating the prices of medicines in the UK on a variety of pharmaceutical price indices. The empirical evidence shows that the overall impact of the rate of return cap appears to have been slight or even null, and in any case that the impact would differ across therapeutic areas. These empirical findings suggest that the price regulation has managed to encourage UK-based firms diversification in many therapeutic areas.[spa] Este trabajo lleva a cabo una evaluación empírica del impacto del principal mecanismo de regulación de los precios de los medicamentos en el Reino Unido sobre un conjunto de índices de precios farmacéuticos entre 1980 y 1994. La evidencia empírica muestra que la incidencia de la tasa de retorno máxima sobre los precios ha sido muy moderada o nula y que, en cualquier caso, el impacto difiere entre áreas terapéuticas. Estos resultados empíricos sugieren que la regulación de precios ha fomentado la diversificación de las empresas farmacéuticas radicadas en el Reino Unido en numerosas áreas terapéuticas

An Exploratory Analysis of Pharmaceutical Price Disparities and Their Implications Among Six Developed Nations

In our study of 43 drugs, prescription drug prices in several wealthy nations (Australia, Canada, France, Germany, and the U.K.) were much lower than in the U.S. on average, well below relative per capita GDP. There was relatively little difference among the five foreign nations. All this is consistent with previous research. After separating less-unique from more unique drugs, however, important new findings emerged. Relative prices for less-unique drugs, which are subject to strong competition, were at about half the U.S. level. We suggest that this reflects the exercise of monopsony power that does not exist in the U.S., where buyers as well as sellers compete. On the other hand, relative prices for highly unique drugs tended to be approximately proportional to per capita GDP or higher. Remarkably, biotech drugs were priced at or above U.S. levels in Canada and France

New insights on the mechanism of quinoline-based DNA methyltransferase inhibitors

Among the epigenetic marks, DNA methylation is one of the most studied. It is highly deregulated in numerous diseases, including cancer. Indeed, it has been shown that hypermethylation of tumor suppressor genes promoters is a common feature of cancer cells. Because DNA methylation is reversible, the DNA methyltransferases (DNMTs), responsible for this epigenetic mark, are considered promising therapeutic targets. Several molecules have been identified as DNMT inhibitors and, among the non-nucleoside inhibitors, 4-aminoquinoline-based inhibitors, such as SGI-1027 and its analogs, showed potent inhibitory activity. Here we characterized the in vitro mechanism of action of SGI-1027 and two analogs. Enzymatic competition studies with the DNA substrate and the methyl donor cofactor, S-adenosyl-L-methionine (AdoMet), displayed AdoMet non-competitive and DNA competitive behavior. In addition, deviations from the Michaelis-Menten model in DNA competition experiments suggested an interaction with DNA. Thus their ability to interact with DNA was established; although SGI-1027 was a weak DNA ligand, analog 5, the most potent inhibitor, strongly interacted with DNA. Finally, as 5 interacted with DNMT only when the DNA duplex was present, we hypothesize that this class of chemical compounds inhibit DNMTs by interacting with the DNA substrate