Report Indicates Authorized Generics Are Here to Stay

Despite strong protests from the generics industry and some lawmakers, brand firms' use of authorized generics to extend the profitability of drugs coming off patent is a trend that will continue to grow, according to a new research report.

"Although we generally agree with the basis of the generic industry's battle cry that authorized generics take advantage of a loophole in the Hatch-Waxman legislation, the practice doesn't appear to break any laws," a recent Prudential Equity Group research report notes.

"At this point, it doesn't look like a legislative solution is likely and the Federal Trade Commission doesn't seem to perceive a problem either. We believe [under these circumstances] that the number of authorized generic agreements will continue to grow and that the practice will become the norm," Prudential said. The company estimated that at least 21 authorized generic drugs have been launched since the practice began several years ago.