News: Intensity Advises on Generic Drug Stockpiling

Intensity was engaged to define modeling criteria for measuring the potential economic effects of generic drug stockpiling to a branded pharmaceutical supplier.

Branded pharmaceutical products can face significant erosion of sales following generic entry.  In some instances, generic drug stockpiling – or building inventory before patent expiry beyond what is needed for regulatory purposes – can allow for high-volume commercial introduction immediately after patent expiration and, in such instances, can thus magnify the impact of generic entry on branded sales and profits.  Intensity analyzed the economic effects of generic stockpiling on a branded supplier and found that these effects, while limited in duration, can be both complex and substantial depending upon specific factual circumstances.  Intensity also determined that the magnitude of these economic effects varies due to multiple factors, including the amount of stockpiled generic product, unconstrained generic demand, generic production capacity, branded and generic pricing strategies, and branded price erosion, among others.

Intensity’s analysis was presented to executives at a branded pharmaceutical supplier to help decide whether to seek injunctive relief against stockpiling, either through an injunction or other potentially available remedy.

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