Incentivizing Drug Affordability: Wildcard Exclusivity Vouchers

route of administration (e.g., oral, topical, injectable) as the brand-name. 1 The innovator/brand-name and generic sectors are differentiated less by the substance of their drugs and more by their business models, strategies, operations, goals, and challenges.Innovators invent and patent medicines, which are marketed exclusively by the patent holder during the patent(s) life.Generic firms target weak patents or off-patent drugs, copy the formula, and sell a "generic" form of the innovator's medicine at a discount.Thus, patent expiration or invalidation results in competition, lower prices, and higher access as generics and innovators market interchangeable products to the same patients.Although generics rely on innovators to invent the next product, short-term success can be mutually exclusive when the two share a market.As innovators' patents age, generic suitor(s) prepare to launch-which may be done "at-risk" (i.e., before the innovator's patent expires) if the generic firm believes a patent is invalid-a discounted, interchangeable version of the original drug.At this stage, the Hatch-Waxman process (to be discussed) for generic entry draws the parties into negotiations.Sometimes, and particularly beneficial to patients struggling with affordability, the parties enter a settlement to allow generic entry prior to patent expiration.In its study of generic entry prior to patent expiration, the Federal Trade Commission ("FTC") identified that "in 7 of the 20 final settlements, the brandname company granted a license to the generic applicant to use the patents that cover the brand-name drug product prior to patent expiration so that the generic applicant could market under its [abbreviated new drug application]" ("ANDA"). 2Another FTC study showed opposite outcomes, where among 218 settlement agreements, "66 final agreements involved some form of compensation from the brand to the generic combined with a delay in generic entry." 3 While not in the majority, these 66 agreements represent "pay-for-delay"-a concerning tactic leveraged by some patent holders to delay generic competition and prop up monopolies. 4As a result, patients "miss out on generic prices that can be as much as 90% less than brand prices.For example, brand-name medication that costs $300 per month might be sold as a generic for as little as $30 per month." 5 Regardless of who (e.g., patient, insurer, taxpayer, public program) pays what "price" (e.g., copays, insurance premiums, list price), the difference between brand and generic price is not small.6. KAISER FAM.FOUND., Poll: Nearly 1 in 4 Americans Taking Prescription Drugs Say It's Difficult to Afford Their Medicines, including Larger Shares Among Those with Health Issues, with Low Incomes and Nearing Medicare Age (Mar.2019), https://www.kff.org/health-costs/pressrelease/poll-nearly-1-in-4-americans-taking-prescription-drugs-say-its-difficult-to-affordmedicines-including-larger-shares-with-low-incomes/[https://perma.cc/BSU2-A3RB].7. Id.