The Effects of Market Exclusivity Loss on Medication Utilization Dynamics: A Comparative Analysis of Cardiovascular and Psychotherapeutic Drugs

Abstract

The following study explores drug utilization trends following generic entry, focusing on cardiovascular and psychotherapeutic drugs. Using Medical Expenditure Panel Survey (MEPS) individual-level prescription data and FDA Orange Book drug application data, I conduct event studies for total, generic, and brand name utilization spanning 10 years pre- and post-entry between 1996 and 2021. Cardiovascular drug utilization experiences a rapid surge post generic entry. On the other hand, psychotherapeutics exhibit an initial dip in utilization followed by a slower, steady increase which can be attributed to concerns regarding narrow therapeutic indices (NTI) and the generic competition paradox (GCP). A secondary analysis stratifies the sample by insurance coverage, finding that patterns of utilization remain consistent but the magnitude of utilization responses increase with lower coverage (uninsured, public, private). Ultimately, the results underscore the need to consider therapeutic class-specific dynamics when formulating policies related to generic entry and addressing the complexities of drug utilization patterns.