Successful drug patent challengers get 180 days of market protection
The Food and Drug Administration rewards successful drug patent challengers by giving them 180 days of generic market exclusivity (see our list of drugs with patent challenge exclusivity). This temporary market protection rewards generic firms for the risks and burdens of challenging drug patents, and it is also a useful tool for subsequent generic entrants.
Generic Portfolio Management and Pipeline Prioritization
Generic drug portfolio management — prioritizing which drugs to develop, and when — is challenging. There are many factors to consider, such as the manufacturing cost, the likely responses actions of brands, the potential for generic competition, and more.
It is also not uncommon for generic entrants to be unaware of all the patents protecting a drug, which further complicates generic pipeline prioritization. Launching on day 181 can help simplify some of these decisions.
Launching on day 181
Observing the generic uptake during the 180-day exclusivity period can help second generic entrants fine-tune their launch strategies, but it also serves a greater purpose. First generic entrants always run the risk that there are blocking patents of which they were not aware. Launching on day 181 avoids this risk; if a brand had a way to keep the successful patent challenger off the market they would have used it.
So, waiting until day 181 (after the first generic patent challenger loses their exclusivity) is an effective way to derisk generic entry with minimal effort. The burden of portfolio management or pipeline prioritization is reduced, and the risk of blocking patents is also addressed.
The downside of day 181 entry is that many other generic companies are likely to also launch on day 181 as well. This will likely result in price drops, impacting profitability for all players.
Generic competition is fierce, and companies use many ways to get an edge. We have many resources to help. For a start, look at Drugs With No Patents And No Competition, DESI Drugs and Non-Bioequivalent Generics.
Identifying Generic Entrants
The FDA does not disclose the identify of generic approval applicants, but there are some tools to proactively determine which companies will likely be launching generics drugs. For more, see How to Use Tentative Drug Approvals to Anticipate Generic Entry.