Patents and Regulatory Exclusivities on GLP-1 Receptor Agonists.

Importance: Glucagon-like peptide 1 (GLP-1) receptor agonists were first approved for the treatment of type 2 diabetes in 2005. Demand for these drugs has increased rapidly in recent years, as indications have expanded, but they remain expensive. Objective: To analyze how manufacturers of brand-name GLP-1 receptor agonists have used the patent and regulatory systems to extend periods of market exclusivity. Evidence Review: The annual US Food and Drug Administration's (FDA) Approved Drug Products With Therapeutic Equivalence Evaluations was used to identify GLP-1 receptor agonists approved from 2005 to 2021 and to record patents and nonpatent statutory exclusivities listed for each product. Google Patents was used to extract additional data on patents, including whether each was obtained on the delivery device or another aspect of the product. The primary outcome was the duration of expected protection from generic competition, defined as the time elapsed from FDA approval until expiration of the last-to-expire patent or regulatory exclusivity. Findings: On the 10 GLP-1 receptor agonists included in the cohort, drug manufacturers listed with the FDA a median of 19.5 patents (IQR, 9.0-25.8) per product, including a median of 17 patents (IQR, 8.3-22.8) filed before FDA approval and 1.5 (IQR, 0-2.8) filed after FDA approval. Fifty-four percent of all patents listed on GLP-1 receptor agonists were on the delivery devices rather than active ingredients. Manufacturers augmented patent protection with a median of 2 regulatory exclusivities (IQR, 0-3) obtained at approval and 1 (IQR, 0.3-4.3) added after approval. The median total duration of expected protection after FDA approval, when accounting for both preapproval and postapproval patents and regulatory exclusivities, was 18.3 years (IQR, 16.0-19.4). No generic firm has successfully challenged patents on GLP-1 receptor agonists to gain FDA approval. Conclusions and Relevance: Patent and regulatory reform is needed to ensure timely generic entry of GLP-1 receptor agonists to the market.

Manufacturer Revenue on Inhalers After Expiration of Primary Patents, 2000-2021.

This study quantifies the revenue earned on all brand-name inhalers approved by the US Food and Drug Administration from 2000 to 2021 and compared earnings before and after expiration of primary patents on these products.

Moving motives: How past and present strategy influence the market.

We investigate the market's reactions to serial acquirers that switch strategy. We collect data on 204 serial acquirers in four high tech industries, and use March's explore-exploit framework, to classify these firms' 1,415 acquisitions. We then distinguish, for example, exploration-based acquisitions, conducted after a series of exploitation-based acquisitions. Our results suggest that the market takes a portfolio perspective when reacting to an acquisition. In support of the ambidexterity literature, we show that the market responds positively to a switch from one type of strategy to another. Zooming in on the direction of the shift, we find that the market responds more positively to a switch towards exploration after exploitation, compared with the alternative. In so doing, we contribute to the literature on acquisition motives, by showing that prior announcements matter in explaining market reactions, and we contribute to the literature on ambidexterity, by showing that the market favours firms that oscillate between exploration and exploitation.

The European tomato market. An approach by export competitiveness maps.

Most empirical studies examining the export competitiveness of a country in a target market are undertaken by focusing on supply, only analysing the group of competing countries. In addition, if the target market to be analysed is extensive, like the European Union, it is generally analysed as a whole. This study presents an evaluation of the tomato export competitiveness, from a differentiated demand perspective, analysing its main customers markets in the context of European Union. The methodological framework is implemented through Constant Market Share to analyze variations in exports, allowing the portion attributable to competitiveness and segregation into general or specific competitiveness to be quantified. The Constant Market Share was adapted to focus on the differentiated demand so as to observe the influence of the worldwide crisis (2007/08) on the European tomato market. This study allows the analysis of profile changes into the competitor exporting economies. As a contribution to the methodology, this study presents a new graphical way of representing the results of Constant Market Share methodology by means of export competitiveness maps in the European tomato market for the group for each main competitor in each European client market. According to our results, Spain and Belgium are candidate countries to be competitive in the main European markets.

Applicability of European Union Competition Law to Health Care Providers: The Dividing Line between Economic and Noneconomic Activities.

Ever-increasing health spending, which, according to future projections, continues to outpace economic growth, will further endanger the financial sustainability of health systems. In a quest to improve the efficacy and efficiency of the health system and thus strengthen its financial sustainability, member states are employing market-based mechanisms to finance, manage, and provide health care. However, the introduction of elements of competition is constrained by the application of EU competition law, which raises significant concerns regarding the applicability of competition law and its limits in the field of health care. Due to the lack of a clear definition in EU legislation, the applicability and scope of competition law are determined on a case-by-case basis, which reveals an inconsistent approach by the European Commission and the CJEU regarding the application of competition law to health care providers and has created legal uncertainty. The aim of this article is to analyze relevant decisions by the commission and the CJEU case law in the pursuit of "boundaries" that may trigger the applicability of competition law with regard to health care providers. Based on the findings of the analysis, the article proposes a set of principles or guidelines for determining whether a health care provider should be considered as an undertaking and, as such, subject to EU competition law.

Market Exclusivity Length for Drugs with New Generic or Biosimilar Competition, 2012-2018.

Brand-name drugs have periods of market exclusivity before generic competition begins. Due to high brand-name drug prices charged during this period, market exclusivity is an important determinant of US prescription drug spending. We used claims data to estimate the market exclusivity period for 264 small molecule and 4 biologic drugs that faced new generic or biosimilar competition from 2012-2018. Exclusivity periods were longer for biologics compared with new small molecule drugs (median 21.5 vs. 14.4 years, P = 0.02), longer for drugs with annual revenue < $75 million compared with those with revenue ≥ $500 million (16.6 vs. 14.2 years, P = 0.01), and shorter in cases for which the first generic was granted 180 days of exclusivity, which is an incentive designed to expedite generic competition (14.1 vs. 15.9 years, P < 0.01). Modified versions of existing products had shorter exclusivities than new drugs (9.9 vs. 14.5 years, P < 0.01), with variation by route of administration, therapeutic area, and use of expedited approval pathways. Exclusivity periods for new drugs ranging from 13-17 years are similar to older estimates, but longer exclusivity among the small number of biologics in the cohort raises concern that overall median exclusivity may lengthen in the future because biologics represent a larger fraction of new drug approvals over the last decade than they did the previous decade. Unnecessarily long exclusivity periods delay patient access to lower-priced medications, and policymakers should consider options to encourage timely competition, particularly among biologic drugs.

Environmental and Organizational Factors Associated with Hospital Use of GPO Services.

Given the potential benefits of Group Purchasing Organizations in cost-containment efforts for hospitals on supplies and purchased services, an important question that remains unanswered is what conditions support or hinder the utilization of GPOs by hospitals. Therefore, this study explores the relationship between GPO use by hospitals and their market and organizational characteristics. Data on hospital GPO utilization and other organizational characteristics were combined with secondary hospital market characteristics. Panel logistic regression with random effects and state and year fixed effects analysis was used to examine the relationship between hospitals' utilization of GPO services and hospitals' organizational and market characteristics. Overall, the majority of hospitals utilized the services of GPOs. Specifically, the number of hospitals utilizing the services of GPOs increased slightly from 3290 (72.2%) in 2004 to 3337 (74.4%) in 2013. In regression analyses, hospitals utilizing the services of GPOs operated in an external environment with mixed levels of munificence, more dynamism, and less competition. Specifically, hospitals operating in a less munificent environment are more likely to utilize the services of GPOs. The study findings provide organizational decision-makers and policymakers' insights into how certain market and organizational factors influence hospital strategy choice, in this case, the use of GPOs.

Effects of innovation and insurance coverage on price elasticity of demand for prescription drugs: some empirical lessons in pharmacoeconomics.

AIM: Prescription drug prices in the United States are considered rather extreme. Americans spend over $460 billion on drugs annually, or almost 17 percent of total national healthcare spending. How innovation incentives and insurance coverage drive pricing, diffusion, and utilization of drugs, under conditions of risk and competition, are multi-dimensional issues in medical economics that remain under-explored in the current empirical literature. We seek to address these issues in reviewing relevant studies presented at the 2020 AEA-ASSA annual convention. APPROACH: Drawn from the 2020 convention panel sessions devoted to health economics, empirical evidence was thematically analyzed for charted new research terrains and trajectories. Their theoretical and practical implications on efficiency, effectiveness, and value in drug production and consumption were then identified. FINDINGS: With certain qualifications, evidence confirms price inelasticity of prescription drugs and medical treatments, along with substitution effects from high or continuously rising prices. While health insurance induces ex ante moral hazard, albeit on a larger scale than previously considered, losing dependent coverage can incentivize price-substitution to risky and illegal drugs, including those sold on the black market. At the firm level, drug patenting and exclusivity rights suggest that innovation incentives increase new or novel clinical trials and generic utilization to a considerable extent. But innovation can produce strong, offsetting effects. It can distort competition and cause (at times sharp) price increases from product-hopping, (compensatory) list pricing, industry mergers and acquisitions, and capture of positive spillovers by competitors, rather than by focal developers, in follow-on innovations. In fine, there remains room for opportunism among firms, particularly market incumbents, and many loopholes are unplugged by U.S. healthcare reform. These make drug utilization costly to the insured, and risky to those who are - or become - uninsured or underinsured for various reasons. CONCLUSIONS: The fundamental disconnect between innovation cost and drug pricing demands public attention and policy intervention, which have proved largely elusive to date. Gaming the system in the name of scientific invention and discovery to reap additional benefits, at the expense of consumer health and income, brings to question the offsetting benefits of firm innovation. It also raises separate issues of fairness and equity. Innovation needs to be considered from the perspective of value lines and beyond conventional marketing incentives to drug utilization, with or without insurance coverage. Cost-effectiveness and cost-benefit analyses figure prominently under a value-based system of resource allocation, insurance, medical prescription, purchasing, and reimbursement.

Low risk, high reward? Repeated competitive biddings with multiple winners in health care.

We study physiotherapy providers' prices in repeated competitive biddings where multiple providers are accepted in geographical districts. Historically, only very few districts have rejected any providers. We show that this practice increased prices and analyze the effects the risk of rejection has on prices. Our data are derived from three subsequent competitive biddings. The results show that rejecting at least one provider decreased prices by more than 5% in the next procurement round. The results also indicate that providers have learned to calculate their optimal bids, which has also increased prices. Further, we perform counterfactual policy analysis of a capacity-rule of acceptance. The analysis shows that implementing a systematic acceptance rule results in a trade-off between direct cost savings and service continuity at patients' usual providers.

Strategic Differentiation of High-Tech Services in Local Hospital Markets.

This study assesses organizational and market factors related to high-tech service differentiation in local hospital markets. The sample includes 1704 nonfederal, general acute hospitals in urban counties in the United States. We relate organizational and market factors in 2011 to service differentiation in 2013, using ordinary least squares regression. Data are compiled from the American Hospital Association Annual Survey of Hospitals, Area Resource File, and Centers for Medicare and Medicaid Services. Results show that hospitals differentiate more services relative to market rivals if they are larger than the rival and if the hospitals are further apart geographically. Hospitals differentiate more services if they are large, teaching, and nonprofit or public and if they face more market competition. Hospitals differentiate fewer services from rivals if they belong to multihospital systems. The findings underscore the pressures that urban hospitals face to offer high-tech services despite the potential of high-tech services to drive hospital costs upward.

Subsidy strategy of pharmaceutical e-commerce platform based on two-sided market theory.

With the development of economic globalization and information technology, enterprises pay more attention to the sustainable development of their e-commerce. Under this trend, we study the subsidy strategy commonly used by pharmaceutical e-commerce platforms in two-sided market. Based on the two-sided market theory, we set up the two-sided user's utility function and formulate the subsidy strategy as the decision of platform profit optimization. We show that the platform chooses to subsidize consumers only if the net income from consumer is lower than the total revenue of drug retailers and platforms in each transaction; the maximum profit for platform increases with the intensity of the network externality. This study provides theoretical support and decision-making suggestions for the pharmaceutical e-commerce platforms to capture the market share, obtain higher profits and ultimately achieve the sustainable development goal.

As Insurers Exit Affordable Care Act Marketplaces, So Do Consumers.

Insurer participation in the Marketplaces for individual health insurance has been lower than expected, with large declines among states using the HealthCare.gov platform for policy years 2017 and 2018. Using HealthCare.gov enrollment data, we examined how insurer exits from the Marketplaces affected consumers' decisions to reenroll-that is, to continue Marketplace participation-in policy years 2015-18. Insurer exit was associated with increased likelihood of consumer disenrollment from Marketplace coverage. The increase was twice as large for unsubsidized consumers (18.3 percentage points) than for consumers who received subsidies in the form of Advance Premium Tax Credits (8.7 percentage points) and was largely independent of premium increases measured using the lowest-cost silver plan available. However, premiums increased more in areas affected by insurer exits than in unaffected areas, contributing to increased disenrollment among unsubsidized consumers in policy years 2016-18. These findings suggest that maintaining insurer participation could encourage continued enrollment in the Marketplaces, while preserving competition to limit premium increases.

Increasing Divergence in Drug Prices Between the United States and Germany After Implementation of Comparative Effectiveness Analysis and Collective Price Negotiations.

BACKGROUND: Payers and purchasers in the United States seek to moderate drug prices and align them with the incremental clinical benefit offered by individual medications; some policymakers have proposed linking U.S. prices to an index of prices paid in other nations. The German health care system resembles that of the United States in featuring multiple private payers but differs in featuring a highly coordinated process of comparative clinical assessment and price negotiations for drugs. OBJECTIVES: To (a) measure trends in prices paid for physician-administered drugs in Germany before and after the mandate for comparative effectiveness assessment and price negotiations in 2011 and (b) compare them with price trends for the same drugs in the United States. METHODS: This study observed trends in the prices paid for 80 physician-administered drugs, which account for approximately half of Medicare Part B drug spending. Quarterly data covering 2004-2018 were obtained for Germany from the Lauer-Taxe database, which contains net prices paid by all German payers. U.S. data were obtained from the Centers for Medicare & Medicaid Services, which publishes net prices paid by private U.S. payers and the Medicare Part B program. These data contain the net prices actually paid after accounting for all discounts and rebates, not merely the manufacturer's list price. Statistical analyses were conducted with multivariable difference-in-differences regression methods. RESULTS: Before implementation in Germany of comparative effectiveness analysis and collective price negotiations, net U.S. prices for physician-administered drugs averaged 29.2% higher (95% CI = 26.6%-31.7) than those in Germany. After implementation of comparative effectiveness assessments and price negotiations in 2011, the divergence between U.S. and German prices increased another 28.9% (95% CI = 23.7%-34.3%). CONCLUSIONS: Commercial health insurers and Medicare pay significantly higher net prices for physician-administered drugs than do insurers in Germany, with the divergence growing after the mandate in Germany that new drugs be subject to comparative effectiveness assessment and collective price negotiations. The experience of Germany may be of special value for the current U.S. debate over pharmaceutical pricing reform, given the demographic, economic, and health system similarities between the 2 nations. DISCLOSURES: This study was supported by the Commonwealth Fund, New York. The sponsor had no role in the study design, conduct, interpretation, or writing up of results. Whaley reports a grant from the National Institute on Aging, unrelated to this work. The other authors have no potential conflicts of interest to report.

How will recent trade agreements that extend market protections for brand-name prescription pharmaceuticals impact expenditures and generic access in Canada?

Canada recently entered into two multinational trade agreements (i.e., the Canada, United States, and Mexico Trade Agreement; and the Comprehensive Economic and Trade Agreement with the European Union). The resulting federal policy changes will prolong periods of market protection afforded to eligible brand-name prescription drugs by extending competition-blocking patent and data exclusivity terms. While previous studies have analysed these two policy changes in isolation, it remains unknown what the total combined impact will be in a typical year. Our objective was to design an analytic approach that can assess more than one change to a country's market protections and then to apply this methodology to the Canadian context. We find that the collective impact of these policy changes will be to extend the regulatory protection period for new drugs from an average of 10.0 years to 11.1 years. Depending upon the model's assumptions and all contingencies considered, an 11% increase equated to an average of $410 million annually (with a minimum estimate of $40 million and a maximum of $1.4 billion). Despite this uncertainty reflected in the range of possible financial impacts, we conclude that such methodological approaches could be useful for rapidly evaluating potential policy changes prior to adoption, which may further assist in budget planning to mitigate increased cost to the downstream health authorities most impacted by these trade concessions.

Competition and health plan quality in the Medicare Advantage market.

OBJECTIVE: To examine the relationship between insurer market structure, health plan quality, and health insurance premiums in the Medicare Advantage (MA) program. DATA SOURCES/STUDY SETTING: Administrative data files from the Centers for Medicare and Medicaid Services, along with other secondary data sources. STUDY DESIGN: Trends in MA market concentration from 2008 to 2017 are presented, alongside logistic and linear regression models examining MA plan quality and premiums as a function of insurer market structure for 2011. DATA COLLECTION/EXTRACTION METHODS: Data are publicly available. PRINCIPAL FINDINGS: MA plans that tend to operate in more concentrated MA markets have a higher predicted probability of receiving a high-quality health plan rating. Operating in more concentrated MA markets was also found to be associated with higher premiums. Among plans that tend to operate in very concentrated MA markets, high-quality MA plans were associated with premiums as much as two times higher than premiums associated with lower-quality plans. CONCLUSIONS: Any policies directed at enhancing insurer competition should consider implications for health plan quality, which may be very different than the implications for enrollee premiums.

America's Health Care System is Broken: What Went Wrong and How We Can Fix It. Part 4: The Pharmaceutical Industry.

As is true for most aspects of the US health care system, we pay much more for medications than do patients in any other country. Not only are new "breakthrough" products expensive, but existing products see price increases that regularly outstrip general inflation, making the pharmaceutical industry very profitable and resulting in many patients skipping or cutting the doses of such critical medicines as insulin. There is little relation between the effectiveness and the price of many medications. Drug firms like to cite the high cost of research and development but spend more on marketing than on research and development. The firms also spend large sums on lobbying and to influence medical thought leaders to keep their profits high. We are alone in spending billions of dollars on pharmacy benefit managers that add little value. With new gene-based therapies on the horizon, the price of therapeutics may be unsustainable.

Market Concentration and Potential Competition in Medicare Advantage.

Issue: Medicare Advantage (MA), the private option to traditional Medicare, now serves roughly 37 percent of beneficiaries. Congress intended MA plans to achieve efficiencies in the provision of health care that lead to savings for Medicare through managed competition among private health plans. Goal: Two elements are needed for savings to accrue: a sound payment policy and effective competition among the private plans. This brief examines the latter. Methods: We use data from 2009­17 to describe market structure in MA, including the insurers offering plans and enrollment in each U.S. county. We measure both actual and potential competitors for each county for each year. Key Findings and Conclusions: MA markets are highly concentrated and have become more concentrated since 2009. From 2009­17, 70 percent or more of enrollees were in highly concentrated markets, dominated by two or three insurers. Since the payment system used to reimburse insurers selling in the MA market relies on competition to spur efficiency and premiums that more closely reflect insurers' actual costs, these developments suggest that taxpayers and beneficiaries will overpay. We also find an average of six potential entrants into MA markets, which points to a source of competition that may be activated in MA. To tap into potential competition, further research is needed to understand the factors affecting entry into MA markets.

How does capital structure change product-market competitiveness? Evidence from Chinese firms.

Finance research shows capital structure has an important effect on the product-market competitiveness of firms. Our paper documents an asymmetric effect of capital structure on firms' competitiveness in a sample of Chinese firms. Firms whose capital structure is characterized by a low leverage but rapid leverage growth has a dominant position in their product market. The industry average leverage ratio is also a critical factor influencing firms' competitiveness. High debt levels hinder firms' competitiveness. The influence of capital structure on firms' product-market competitiveness varies based on the extent of industry concentration. In highly concentrated industries, high leverage level and slow leverage growth suppress firms' competitiveness to a larger extent compared with industries with low concentration.