Comment by radicalbyte | Hacker News Reader

Comment by radicalbyte | Hacker News Reader

Something about this article doesn't add up. According to the article:

  1. Brands charge a premium of 10x-20x compared to generics.
  2. Brands are offering non-brand versions at about 50% of branded price.
  3. Brands pay 50% kickbacks to middle men (so cut =  revenue neutral).
  4. Offering the cheaper version kills real generic competition.

How can 4 be true when brands haven't done anything to their net margin and the generics are still a factor cheaper than the non-branded "brand" version?

It just sounds like a bit of trickery to shut the politicians up more than something designed to hurt their competitors.

I think the point is that they use an in-house generic, priced at their normal revenue, to get a 180d monopoly and establish a second brand. This is all on top of their existing monopoly from the original patent.

That's quite scummy, but presumably the examples in the article have already lost their competitive edge? The EpiPen authorized generic was launched roughly 3 years ago.

My understanding is that, by taking away the 180d exclusivity window from generic manufacturers, the latter are less likely to risk developing their own version of the product

A risk with 4. is that the fake generic's price could drop from 50% of branded price to much lower to kill off competition or at least make it hard for the competitor to justify all their initial start up costs.

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