Competition and price among brand-name drugs in the same class: A systematic review of the evidence

PLoS Medicine Aug 04, 2019

Sarpatwari A, DiBello J, Zakarian M, et al. - A systematic literature review of peer-reviewed health policy and economics literature was conducted by the researchers in order to better comprehend the interplay between new drug entry and intraclass drug prices. Published research on brand–brand competition were analyzed, including 10 studies assessing a wide range of drug classes. None of the 10 studies could identify, however, whether brand–brand competition reduced the published (“list”) price of existing brand-name drugs within a class. The brand–brand competition may help restrict launch list prices, and the impact of the brand–brand competition may be reconciled by the relative drug quality and marketing, with safer or more efficient new drugs and higher marketing correlated with higher intraclass list prices. Some of the barriers to the brand–brand competition having a greater impact on list prices included physicians not prescribing the most cost-efficient treatments due to lack of information, restrictions on payers’ capabilities to set one manufacturer against another in drug price negotiations, and the misled incentive for pharmacy advantages managers to take high list prices of brand-name drugs. Hence, policies to promote the brand–brand competition in the US pharmaceutical market, such as accelerating approval of non-first-in-class drugs, would suitably not lead to decreased drug list prices absent further structural reforms.

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