Healthcare and Science thomsonreuters.com

My background is in economics and I'm based at the Institute of Developing Economies — Japan External Trade  Organization, focusing on generic pharmaceutical companies and their activities in Asia and the US.

There is a huge level of competition in the industry; with generic companies producing copies of drugs, originally developed by the innovator pharmaceutical companies, which have gone off patent. 

Basically what the generics do is wait for the patents to expire — the trouble is that because there are so many filed at different stages, no-one really knows when the drug is completely off patent.

So the generics then compete to be the first to copy the drug, as they will be in line to make the most profit. My research is based on trying to estimate a model for the interaction between the innovator pharmaceutical company and the generics as well as activity between the generics themselves. 

For them, it's all about knowing who is going to enter into the market and when. The interesting part is the patent litigation. In the US market there's a unique regulatory aspect whereby the first generic company to succeed in litigation against the innovator pharmaceutical company is rewarded with a six month exclusivity to manufacture that drug. This can translate into hundreds of millions of dollars and creates a huge incentive for generics to compete.

Innovators mitigate this activity through various means, such as pursuing more aggressive intellectual property strategies, colluding with a 'first in line' generic company to delay competition in the post-patent expiration market, and introducing their own generic product during the six month exclusivity period to reduce the first entrant's profits.

What makes the nature of competition so unique in the pharmaceutical industry is the aggressive way in which the generic companies challenge patents, sometimes destroying the value of the innovator's intellectual property in the process. In many cases, the generics file their product approval dossiers on the first possible day regulation allows, even though they know there's a strong patent running on a drug for many more years,

It's a fierce, ongoing battle with vested interests at play from patient groups to the pharmaceutical companies themselves. The regulatory and competition authorities also play a significant role as rule-makers, and their actions have immense consequences for how the markets play out.

There's currently a significant research project underway by the Federal Trade Commission (FTC) in the US and my hope is that my research will help shed some light on this area and contribute to the policy discussions.

Thomson Reuters provides me with useful information, especially on patents. Traditional databases assume the user has a certain level of technical knowledge, so for a social scientist like me who has little knowledge about patent definitions, it has been difficult to extract correct information on the relevant patents.  By accessing Thomson Pharma and Newport Horizon I can research the number and type of patents filed by innovators, at what time and for which product.