January 2016
`
`Price Declines after Branded
`Medicines Lose Exclusivity in the U.S.
`
`Novo Nordisk Exhibit 2484
`Mylan Pharms. Inc. v. Novo Nordisk A/S
`IPR2023-00724
`Page 00001
`
`
`
`Price Declines after Branded
`Medicines Lose Exclusivity in the U.S.
`
`Novo Nordisk Exhibit 2484
`Mylan Pharms. Inc. v. Novo Nordisk A/S
`IPR2023-00724
`Page 00001
`
`
`
`Introduction
`
`
`When novel medicines lose exclusivity in the United States, competitors quickly enter the
`market and bring about rapid decreases in price. With the world’s highest generic
`efficiency rate – the extent to which patients switch from the brand to a generic medicine
`following loss of exclusivity – the U.S. healthcare system captures maximum cost benefit
`from these events.
`
`In previous reports, such as Medicine Use and Shifting Costs: A Review of the Use of
`Medicines in 2014, we measured the share of total prescription volume represented by
`generic medicines and the impact of patent expiries on aggregate spending.
`
`The purpose of this healthcare brief is to document the changing price of medicines as
`generics enter the market. While the public discourse and debate are focused on the issue
`of rising drug costs, we take this opportunity to highlight the reduction in prices associated
`with the use of generic medicines.
`
`The study was conducted by the IMS Institute with funding support from the
`Pharmaceutical Research and Manufacturers of America (PhRMA). The contributions to
`this healthcare brief of Lauren Caskey, Bernie Gardocki, and Michael Kleinrock are
`gratefully acknowledged.
`
`
`Murray Aitken
`Executive Director
`IMS Institute for Healthcare Informatics
`
`IMS Institute for Healthcare Informatics, 100 IMS Drive, Parsippany, NJ 07054, USA
`info@theimsinstitute.org www.theimsinstitute.org
`
`©2015 IMS Health Incorporated and its affiliates. All reproduction rights, quotations, broadcasting, publications reserved. No part of this
`publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any
`information storage and retrieval system, without express written consent of IMS Health and the IMS Institute for Healthcare Informatics.
`
`Novo Nordisk Exhibit 2484
`Mylan Pharms. Inc. v. Novo Nordisk A/S
`IPR2023-00724
`Page 00002
`
`
`
`Methodology
`
`
`This study measures price declines following loss of exclusivity for every medicine that
`first became available as a generic between 2002 and 2014.
`
`Sales data was obtained from the IMS National Sales Perspectives (NSP)TM, a near census
`level audit of the U.S. pharmaceutical market. Prices in the audit are best thought of as the
`average invoice price of a product prior to the negotiation of off-invoice discounts and
`rebates. The average invoice price is typically lower than the list price, but higher than the
`net price.
`
`This study compares the price of each branded medicine in the year prior to loss of
`exclusivity to the average price of all generics of the same molecule and formulation on the
`market in the months that follow. The average price reduction for each cohort is weighted
`by the pre-expiry sales of each branded medicine. Changes in volume after loss of
`exclusivity are not taken into account.
`
`Price reductions in the ten year analysis are measured at twelve month intervals for 428
`products with at least twelve months of generic sales history.
`
`Oral medicines were grouped into four cohorts based on generic entry year in the monthly
`analysis, which includes 302 products with at least four months of generic sales history.
`Some medicines in the 2011-2013 cohort have less than 36 months of generic sales data.
`One medicine, clopidogrel, is included in both the 2005-2007 and 2011-2013 cohorts due
`to the brief availability of generics six years prior to the brand’s loss of exclusivity in 2012.
`
`
`
`Price Declines after Branded Medicines Lose Exclusivity in the U.S. Report by the IMS Institute for Healthcare Informatics.
`
`1
`
`Novo Nordisk Exhibit 2484
`Mylan Pharms. Inc. v. Novo Nordisk A/S
`IPR2023-00724
`Page 00003
`
`
`
`Key Findings
`
`
`Generic drugs greatly reduce the price of medicines. Generics enter the market at
`substantially lower prices than the brands for which they are substituted, and their prices
`continue to fall in subsequent years. This creates savings for patients, payers, and the
`healthcare system as a whole.
`
`Generics that entered the market between 2002 and 2014 reduced the price of medicines
`by 51% in the first year and 57% in the second year following loss of exclusivity. Prices of
`oral medicines were reduced further, by 66% in the first year and 74% in the second year
`after generic entry. Within five years, prices of generic oral medicines fell to 80% from
`their pre-expiry brand prices.
`
`Over the last decade, oral generic medicines have reduced prices more rapidly and to a
`greater extent. Oral generics that entered the market between 2011 and 2013 had prices
`74% lower than pre-expiry brand prices within 8 months of becoming available, compared
`to only a 36% reduction for 2002 to 2004 expiries. Prices were 90% lower within 2.5 years
`for oral generics in the most recent group of expiries. Immediate savings in the first month
`of generic availability has also accelerated, with 46% lower prices in the first month
`compared to reductions of only 36% for oral generics that entered the market between
`2002 and 2004.
`
`The slope of the monthly price reduction line for generics reflects the number and price
`levels of competitors in the market following the original brand’s loss of exclusivity. In
`some cases, a generic manufacturer is granted a 180-day exclusivity period, after which
`more manufacturers typically enter the market. This typically results in a price reduction
`line that plateaus for the first six months before declining further.
`
`Price Declines after Branded Medicines Lose Exclusivity in the U.S. Report by the IMS Institute for Healthcare Informatics.
`
`2
`
`Novo Nordisk Exhibit 2484
`Mylan Pharms. Inc. v. Novo Nordisk A/S
`IPR2023-00724
`Page 00004
`
`
`
`Generic drugs enter the market at lower
`prices than the brands they replace, and
`their prices continue to decline
`
`Monthly Price Reductions after Loss of Exclusivity
`0%
`
`Oral Medicines
`
`All Medicines
`
`-51%
`
`-57%
`
`-66%
`
`-66%
`
`-66%
`
`-67%
`
`-74%
`
`-77%
`
`-78%
`
`-77%
`
`-78%
`
`-80%
`
`-78%
`
`-77%
`
`-80%
`
`-80%
`
`-80%
`
`-81%
`
`-81%
`
`-81%
`
`0
`
`-20%
`
`-40%
`
`-60%
`
`-80%
`
`-100%
`
`Price Reduction
`
`12
`
`24
`
`72
`60
`48
`36
`Months Since Loss of Exclusivity
`Source: IMS Health, National Sales Perspectives, March 2015
`
`84
`
`96
`
`108
`
`120
`
`• The immediate price reduction following
`generic entry is substantial, and is followed
`by continued savings in subsequent years.
`
`• After six years, the price reductions for
`injectable medicines are nearly equal to the
`price reductions for oral medicines.
`
`• Twelve months after generic entry, prices of
`oral generic medicines drop 66%.
`
`• Oral generics cost 80% less than the brands
`they replace within five years.
`
`• Oral generic prices are 74% lower than
`pre-expiry brand prices after two years.
`
`• Price reductions occur faster for oral
`medicines than for injectable drugs, which
`often attract fewer generic competitors.
`
`
`
`• Many patients benefit from the availability
`of low cost medications, as 88% of all
`prescriptions are dispensed as generics.
`
`Chart note: Includes 428 medicines with at least twelve months of generic sales data, of which 288 are oral medicines.
`Price Declines after Branded Medicines Lose Exclusivity in the U.S. Report by the IMS Institute for Healthcare Informatics.
`
`3
`
`Novo Nordisk Exhibit 2484
`Mylan Pharms. Inc. v. Novo Nordisk A/S
`IPR2023-00724
`Page 00005
`
`
`
`More recent generic entries have exhibited
`steeper and faster price reductions than
`earlier cohorts
`
`Monthly Price Reductions for Oral Medicines after Loss of Exclusivity
`0%
`
`2002-2004
`2005-2007
`2008-2010
`2011-2013
`2002-2014
`
`-20%
`
`-40%
`
`-60%
`
`-80%
`
`-100%
`
`Price Reduction
`
`0
`
`18
`12
`Months Since Loss of Exclusivity
`Source: IMS Health, National Sales Perspectives, March 2015
`
`6
`
`24
`
`30
`
`36
`
`• The average price of medicines that lost
`exclusivity between 2002 and 2014 fell 66%
`twelve months after generic entry.
`
`• Prices for medicines in the most recent
`cohort dropped further and faster than
`earlier expiries, partly due to the loss of
`exclusivity for a handful of blockbusters.
`
`• The price of generic medicines that entered
`the market between 2011 and 2013 fell 79%
`within 12 months compared to 44% for
`generics that entered the market between
`2002 and 2004.
`
`• Nearly all reductions in price now occur in
`the first eight months after generic entry.
`
`• Generic oral medicines now cost 90% less
`than the original brand within 30 months.
`
`• The brief plateau in price reductions for
`generics that can be observed in some of
`the cohorts is driven primarily by the
`presence of a manufacturer granted 180-
`day exclusivity due to a successful
`Paragraph IV challenge.
`Chart note: Includes 302 oral medicines with at least four months of generic sales data.
`Price Declines after Branded Medicines Lose Exclusivity in the U.S. Report by the IMS Institute for Healthcare Informatics.
`
`4
`
`Novo Nordisk Exhibit 2484
`Mylan Pharms. Inc. v. Novo Nordisk A/S
`IPR2023-00724
`Page 00006
`
`
`
`Novo Nordisk Exhibit 2484
`Mylan Pharms. Inc. v. Novo Nordisk A/S
`IPR2023-00724
`Page 00007
`
`
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