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The Impact of Patent Expiry on Drug Prices: A Systematic Literature Review

Author

Listed:
  • Gerard T. Vondeling

    (University of Groningen)

  • Qi Cao

    (University of Groningen)

  • Maarten J. Postma

    (University of Groningen)

  • Mark H. Rozenbaum

    (University of Groningen)

Abstract

Objective The aim of this study was to evaluate the impact of patent expiry on drug prices by means of a systematic literature review. Methods A systematic literature search was performed in PubMed to identify all published literature on the impact of patent expiration on drug prices. Additional literature was identified using a less distinct syntax in Google Scholar and EconLit. Data extraction followed a standardized assessment form containing the domains study type, study aim, reported outcomes, number of drugs and drug classes assessed, and originators or generics assessed. Results The 16 identified studies that assessed impact of patent expiry on drug prices showed that price developments after patent expiration varied between countries. The included studies assessed price developments for the USA, Canada, Australia, the UK, the Netherlands, Germany and France, Spain, Italy, Norway, Sweden and Denmark. The number of drugs included within different studies ranged between 1 and 219. The identified studies indicated that drug prices decreased significantly after patent expiry with drug price ratios ranging from 6.6 to 66% 1–5 years after patent expiry. Conclusion Drug prices decrease significantly after patent expiry. The extent of this price reduction varied greatly between products and countries. For this reason, country-specific analyses on price developments after patent expiry should be used when these are considered in decision making. Future research should be dedicated to gathering more country-specific data to reduce the uncertainty with regard to price developments.

Suggested Citation

  • Gerard T. Vondeling & Qi Cao & Maarten J. Postma & Mark H. Rozenbaum, 2018. "The Impact of Patent Expiry on Drug Prices: A Systematic Literature Review," Applied Health Economics and Health Policy, Springer, vol. 16(5), pages 653-660, October.
    • Handle: RePEc:spr:aphecp:v:16:y:2018:i:5:d:10.1007_s40258-018-0406-6
    DOI: 10.1007/s40258-018-0406-6
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    References listed on IDEAS

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    1. Atanu Saha & Henry Grabowski & Howard Birnbaum & Paul Greenberg & Oded Bizan, 2006. "Generic Competition in the US Pharmaceutical Industry," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 13(1), pages 15-38.
    2. Lexchin, Joel, 2004. "The effect of generic competition on the price of brand-name drugs," Health Policy, Elsevier, vol. 68(1), pages 47-54, April.
    3. Henry G. Grabowski & David B. Ridley & Kevin A. Schulman, 2007. "Entry and competition in generic biologics," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(4-5), pages 439-451.
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    4. Shiri Mermelstein & Hilde Stevens, 2022. "TRIPS to Where? A Narrative Review of the Empirical Literature on Intellectual Property Licensing Models to Promote Global Diffusion of Essential Medicines," ULB Institutional Repository 2013/337220, ULB -- Universite Libre de Bruxelles.

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