Speedy generic approval may not benefit consumers as much as expected, Rotman model shows

Although faster approval times for generic drugs will get them into consumers' hands quicker, this may not make the price any better, a Canadian pricing and marketing researcher has found.

A mathematical model created by Andrew Ching, an associate professor of marketing at the Rotman School of Management at the University of Toronto, Canada, shows that fewer firms enter the marketplace because the chances of getting there first - and commanding the best profits - are dramatically smaller when drug approval times are shorter.

Using the drug clonidine, Prof Ching's model showed the number of firms in the marketplace dropped by 25%, from 12 to nine, under a shortened approval time scenario. "Potentially, for the consumer, the price may not drop as much as you'd hope," said Prof Ching.