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New Medicaid regulations could force authorized generic drugs out of the market, according to Bates White Principal Chris Stomberg
WASHINGTON, D.C., December 15, 2006—Chris Stomberg, Ph.D., a Principal at Bates White, LLC, has published an article that explores how drug manufacturers might alter their approach to authorized generic drugs in light of upcoming changes in Medicaid rebate rules. The article, “Will Medicaid Reform Affect Brand-Name Manufacturers’ Choices to Market Authorized Generic Versions of Their Drugs?” appears in the November 2006 issue of the American Bar Association’s Antitrust Health Care Chronicle.
Generic drugs can quickly erode pharmaceutical companies’ profit margins, and, to protect their return on investment (ROI) on brand name drugs, pharmaceutical companies are devising strategies to develop and market their own generics. But, Stomberg contends, Medicaid reform may impact this seemingly viable option. One of the key changes to Medicaid’s rules, slated to go into effect on January 1, 2007, is a requirement that includes prices of authorized generic drugs in the calculation of Medicaid rebates paid by brand-name drug manufacturers. Stomberg argues that this apparently subtle rule change may make it unprofitable for some manufacturers to market authorized generic drugs.
About Bates White
Bates White is a national economic consulting firm of more than 150 professionals.
Established in 1999, Bates White offers consulting services in economics,
finance,
and business analytics. Bates White has offices in Washington, D.C., and San
Diego, Calif.
www.bateswhite.com
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