The Long Shadow of Patent Expiration. Generic Entry and Rx-to-OTC Switches
In this paper we have reported results of our research examining the “sunset” H2s up to and following their Rx patent expiration, as they encountered cannibalization from their own and competitors’ OTC introductions, and as they faced forces of creative destruction from the next generation of more potent antiulcer and heartburn Rx drugs, the PPIs. Although the looming prospect of patent expiration had significant impacts on the behavior of the H2 manufacturers in terms of their pricing and marketing behavior, it was more than the shadow of patent expiration that dimmed the H2 prospects—undoubtedly, the forces of dynamic competition in the form of the newly dominant PPI products were equally foreboding. Within this larger context, consumers appear to have benefited from generic entry and the introduction of OTC versions of previously prescription-only H2s.