Pharma_2 - Pharmaceuticals II PAM 435 April 3, 2008 Product...

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Pharmaceuticals II PAM 435 April 3, 2008
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Product Life Cycle: Revenue Grows Sharply Over Time, Then Falls Precipitously
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Major Generic Launches in 2006 Generic Penetration Rates Simvastatin Pravastatin Sertraline Weeks from patent expiration
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Generic Drugs Are Much Less Expensive Than Their Branded Counterparts Source: drugstore.com, accessed on 4/2/08. $3.33 $4.50 $0.54 $0.82 Prozac Zocor Branded Generic Price per pill simvastatin fluoxetine HCL Q: why does anybody buy the branded drug?
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The Growth of Generics: the 1984 Waxman Hatch Deal Branded, or patent-protected, drugs receive up to 5 years patent “restoration” for time lost in trials and FDA review Generics got: abbreviated new drug applications (ANDAs) sufficient to prove bioequivalence to existing drug 180 day exclusivity for first generic to successfully challenge patent of branded product. FDA now approves over 300 generics annually
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Overview of Patents and Market Exclusivity 2000 2004 2010 2012 2025 20-year patent filed on a drug Clinical Trials FDA Review Hatch-Waxman Act: extends patent for one-half of time drug was in clinical trials (3 years) + all time time drug was under FDA review (2 years), up to max of 5 years. Effective patent life : 8 years remaining on original patent + 5 year extension due to Hatch-Waxman + 0.5 year pediatric extension for conducting pediatric dosing studies. 13.5 years Note : generic manufacturers need to prove their drug is bio-equivalent to the drug losing patent protection.
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Generic Drugs Now Account for Over 60% of Prescriptions
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0 5000 10000 15000 20000 25000 30000 1996 1997 1998 1999 2000 2004 DTC ads Samples MD journal ads Detailing Source: IMS Health & CMR Competitive Media Reporting, 2001; Berndt and Donohue, 2006. Physician focused (“Push”) Consumer focused (“Pull”) Millions of dollars Cost of samples: retail value. Makes Marketing/Advertising Very Important
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An Ongoing Controversy Advertisements contain the only truth to be relied on in a newspaper .” Thomas Jefferson Advertising is a racket … its constructive contribution to
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This note was uploaded on 09/12/2008 for the course PAM 4350 taught by Professor Nicholson during the Spring '08 term at Cornell University (Engineering School).

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Pharma_2 - Pharmaceuticals II PAM 435 April 3, 2008 Product...

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