Health Affairs, 26, no. 3 (2007): 790-799 doi: 10.1377/hlthaff.26.3.790 © 2007 by Project HOPE	New Online   Pay Cuts For Medicare Docs   Access To Care Woes   Public Coverage More Efficient   Empowering Consumers

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Authorized Generic Drugs, Price Competition, And Consumers’ Welfare

The growing frequency of authorized generics has important implications for the welfare of prescription drug consumers. Authorized generic entry could affect the timing of generic entry, brand-name and generic prices, and generic penetration. We reviewed 1999–2003 data and found that generic entry in the absence of short-run exclusivity restrictions benefits consumers through lower short-run prices. We suggest that these benefits likely also result from authorized generics. We posit that long-run prices and shares are likely essentially unaffected by authorized generics and that potential costs to consumers from any delayed generic entry are likely small.

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