Pay-for-delay (“PFD”) agreements, in which a brand-name pharmaceutical company agrees to pay a generic drug company to delay the release of the generic version of the brand-name drug, have been controversial and the subject of substantial litigation. The Federal Trade Commission has, generally, taken the position that PFD agreements are anti-competitive and harm consumers. But, those in favor of PFD agreement argue differently.

In an article for Law360, we empirically estimate brand-name firms’ incremental revenue resulting from delaying the entry of generic substitutes for their pharmaceutical products. Using a dataset of 65 drugs that were not involved in PFD agreements and 13 that were, we find that the brands’ total anticipated incremental revenue from delaying generic entry is $17.6 billion. We also find that delaying generic entry by a single year generates, on average, 3.7 times the brand-name drug’s annual revenue.

Read the full article in Law360.

About the Authors

Atanu Saha-HS

Atanu Saha

Atanu Saha, a Partner with StoneTurn, has over 25 years of experience in the application of economics and finance to complex business issues. He has served as an expert witness […]

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StoneTurn

Yong Xu

Dr. Yong Xu, a Managing Director with StoneTurn, brings over 20 years of experience in the application of economics, finance, and statistics to complex business issues. He has provided expert […]

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Narinder Walia

Narinder Walia

Narinder Walia, a Managing Director at StoneTurn, has over 15 years of experience in financial advisory services and complex litigation matters. Narinder has worked with corporate, government, legal and regulatory clients […]

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