Authorized generics 'increase competition'

Following reports that US drug major Merck & Co had slashed the price of its cholesterol-lowering drug Zocor (simvastatin) to health insurer the United Health Group to levels that undercut generic equivalents (Marketletter July 3), a study for the Pharmaceutical Research and Manufacturers of America (PhRMA) has found that authorized generics can boost competition and lower prices for consumers.

The research was carried out by IMS Health, comparing cases where a generic drugmaker secured a six-month market exclusivity versus cases where the brand-name manufacturer authorized generic versions of an ex-patent drug as well. IMS Health detected an average 15.8% greater discount where authorized generics were marketed. In nine case studies, the savings were estimated at $212.8 million.

Lori Reilly, PhRMA vice president for policy and research described the situation as, "a win-win for patients."