Repositioning Generic Drugs: Empirical Findings and Policy Implications

Abstract

Commentators claim that drug repositioning (i.e. developing new uses for authorised drugs) significantly slows when generics are authorised and, therefore, law reform is necessary to encourage more R&D. This study empirically examines this claim by analysing records of clinical trials. It finds that once generics are authorised: (i) commercial trials continue at “active” rates for approximately half of the drugs studied, and (ii) the number of hospital and university trials actually increases. These findings cast doubt on whether additional incentives are needed. They also indicate that a more effective way to reposition drugs is for recently established government programmes to embrace IP strategies and leverage the hospital and university trials as an R&D pipeline.