Product-Line Extensions and Pricing Strategies of Brand-Name Drugs Facing Patent Expiration
Why this work is in the frame
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Bibliographic record
Abstract
OBJECTIVE: This study proposed an alternative to brand loyalty as the explanation for the continued price rigidity of patent-expired brand-name prescription drugs despite the increase in market entry of generic drugs facilitated by the 1984 Drug Price Competition and Patent Term Restoration Act. Study hypotheses were to test (1) whether market entries of new-product extensions are associated with market success of original brand-name drugs before generic drug entry, and (2) whether original brand-name drugs exhibit price rigidity to generic entry only when they are extended. METHODS: The design is a retrospective follow-up study for the prescription drug brands that lost their patents between 1987 and 1992. The drug brands were limited to nonantibiotic, orally administered drugs containing only 1 active pharmaceutical ingredient. Information on patent expiration, entry of a product extension, and market success were determined from the U.S. Food and Drug Administration.s Orange Book, First DataBank, and American Druggist, respectively. Market success was defined as whether an original drug brand was listed in the top 100 prescriptions most frequently dispensed before facing generic entry. Product-line extension was defined as the appearance of another product that a company introduces within the same market after its existing product. Drug prices were average wholesale prices from the Drug Topics Red Book. The relationship between product-line extension and market success was examined using a logistic regression analysis. The price rigidity to entry was tested using a panel regression analysis. RESULTS: A total of 27 drug brands lost their patents between 1987 and 1992. Drug brands that achieved market success were 16 times more likely to be extended than were those that did not (OR=16, 95% confidence interval, 2.12-120.65). The price rigidity to entry existed in drug brands with extensions (beta=2.65%, P <0.033), but not in those brands without extensions (beta=-2.40%, P <0.001). CONCLUSION: This study provided some support for the alternative explanation to brand loyalty that a new product-line extension introduced for an original brand helps the original price be rigid despite the entry of generic drugs facilitated by the 1984 Drug Price Competition and Patent Term Restoration Act.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it