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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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1935-1682
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Therapeutic Equivalence and the Generic Competition Paradox

Munirul Haque Nabin
  • 1Deakin University
  • Email:
/ Vijay Mohan
  • 2Deakin University
  • Email:
/ Aaron Nicholas
  • 3Deakin University
  • Email:
/ Pasquale M. Sgro
  • 4Deakin University
  • Email:
Published Online: 2012-11-12 | DOI: https://doi.org/10.1515/1935-1682.3234

Abstract

Following the passage of the Waxman-Hatch Act (1984), FDA approval for a generic drug requires the establishment of bio-equivalence between the generic drug and an FDA approved branded drug. However, a large body of evidence in the medical community suggests that bio-equivalence does not guarantee therapeutic equivalence; in some instances the lack of therapeutic equivalence can lead to fatal consequences for patients switching to generic products. In this paper, we construct a simple model to analyze the implications of therapeutic non-equivalence between branded and generic drugs. We show, theoretically and empirically, that this distinction can provide a plausible explanation of the generic competition paradox.

This article offers supplementary material which is provided at the end of the article.

Keywords: therapeutic equivalence; generic competition paradox

About the article

Published Online: 2012-11-12



Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, DOI: https://doi.org/10.1515/1935-1682.3234. Export Citation

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