Entry limiting agreements: first mover advantage, authorized generics and pay-for-delay deals

Bokhari, Farasat, Mariuzzo, Franco and Polanski, Arnold (2020) Entry limiting agreements: first mover advantage, authorized generics and pay-for-delay deals. Journal of Economics & Management Strategy, 29 (3). pp. 516-542. ISSN 1058-6407

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Abstract

During patent litigation, pay-for-delay (P4D) deals involve a payment from a patent holder of a branded drug to a generic drug manufacturer to delay entry and withdraw the patent challenge. In return for staying out of the market, the generic firm receives a payment, and/or an authorized licensed entry at a later date, but before the patent expiration. We examine why such deals are stable when there are multiple potential entrants. We combine the first-mover advantage for the first generic with the ability of the branded manufacturer to launch an authorized generic (AG) to show when P4D deals are an equilibrium outcome. We further show that limiting a branded firm's ability to launch an AG before entry by a successful challenger will deter such deals. However, removing exclusivity period for the first generic challenger will not.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
Related URLs:
Depositing User: LivePure Connector
Date Deposited: 25 Apr 2020 00:03
Last Modified: 05 Aug 2020 23:48
URI: https://ueaeprints.uea.ac.uk/id/eprint/74835
DOI: 10.1111/jems.12351

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