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Revised 24 June 2003.

Abstract

Patent expiry signals a fundamental shift in the way in which drugs are marketed and purchased. The entry of generic competitors requires a variety of different healthcare stakeholders to implement an alternative set of objectives and approaches in order to take advantage of the new opportunities which genericisation brings about. This paper concentrates on two perspectives, that of the original brand manufacturer and that of the payer. It examines, through the use of international examples, how approaches to pricing change pre- and post-patent expiry in view of the altered objectives and regulatory framework. It is demonstrated that manufacturer and payer alike have a number of alternative pricing approaches which could be implemented, each having a different set of aims and consequences.