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Early entry of generic drugs not deterring competition, benefiting original producers

Authorized Generic Entry prior to Patent Expiry: Reassessing Incentives for Independent Generic Entry
Silvia Appelt

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Patent holders sometimes allow generic versions of their drugs to enter the market early to reduce the impact of losing their monopoly. This study looked at how this early entry affects the decision of other generic companies to enter the market. The researchers found that the decision to enter the market early is mainly driven by profit-seeking rather than trying to prevent competition. The amount of money a drug makes before its patent expires influences both early entry and independent generic entry decisions. Overall, allowing early entry does not significantly affect the likelihood of other generic companies entering the market.