The characteristics of our sample of 37 PIV drug markets are presented in Technical Supplement Table 1 (see ESM). For our descriptive statistics and empirical model, we characterize our sample in three groups. The first is the total sample of FTF PIV generic drugs (n = 37); the second is the subset of FTF PIV generics that had lower sales in Month 7 than in Month 6 (n = 25); and the third is the subset of FTF PIV generics that had higher sales in Month 7 than in Month 6 (n = 12).

Across all 37 PIV markets, the average decline in sales for the FTF generic from Month 6 to Month 7 was 13.0% (Technical Supplement Table 1), and Month 7 sales were 7.8% lower than the average monthly sales during the 180-day exclusivity period. The average decline in sales from Month 6 to Month 7 was 15.4% for FTFs competing with an AG during the exclusivity period and 8.4% for those without AG competition. The presence of multiple FTF generics during the 180-day exclusivity period resulted in a slightly steeper decline in FTF sales from Month 6 to 7 (17.2% vs 12.3%). We also observed a decline in average sales for FTF generics from market entry through Month 6 (Fig. 1).

Average monthly sales (in 2021 U.S. dollars) for Months 1 through 7, by type of PIV drug market. FTF first-to-file generic, PIV paragraph IV certification

In 25 of the 37 PIV drug markets, the FTF experienced a decline in sales from Month 6 to Month 7 (Table 1). Among the 25 FTF generics with lower sales in Month 7 than in Month 6, the average decrease was 29.0%. The decrease in sales from Month 6 to 7 did not vary significantly by whether there was a single FTF generic during the 180-day exclusivity (29.2%) or multiple FTF generics (28.0%) among this subset. The decline in sales for the FTF generic from Month 6 to Month 7 was 38.4% among markets that had an AG during their 180-day exclusivity period and 15.0% when no AG was present.

Among this subset, the most intuitive reason for the decline in sales would be the entry of new generic competitors into the market. While it is tempting to infer that, for the FTF generics in our sample, the average effect of adding a seventh month of market exclusivity is an average increase in sales of 13.0% over realized sales in Month 7, it would be fallacious. We would expect that an extra month of exclusivity will not harm or undermine the sales of those 12 FTF generics in our sample that managed to increase their sales in Month 7. Therefore, we excluded their percentage change in sales when calculating the average value of an extra month of exclusivity in our general results. Instead, we infer that an extra month of exclusivity for those FTF generics would enable even larger increases in sales than observed. In addition, in this study it is not possible to separate the value of being the FTF, which by itself confers an advantage in formulary position, from the value of losing some market share.

Among the remaining 12 PIV drug markets in which the FTF experienced an increase in sales (Table 1), the average gain in sales was 20.5% and Month 7 sales were 18.5% higher in comparison to the average monthly sales during the 180-day exclusivity period. In contrast to those PIV markets in which the FTF sales decreased from Month 6 to 7, in this subset, there was a larger increase in sales from Month 6 to 7 (22.8%) with an AG in the market than when there was no AG (13.6%). The small sample size for this subset (n = 12), however, constrains the reliability of these results. Some reasons why an FTF generic might experience greater sales in Month 7 than in Month 6 include a declining market share for the brand drug versus its lower-priced generic competitor; no new generic competitors entering the market; a more intensive and effective sales force effort; the observation by potential customers that the FTF generic has performed well medically with minimal side effects, an even lower price per unit, etc.

In addition to the above descriptive statistics regarding changes in sales, we also observed that in 30 out of 37 PIV drug markets in our sample (Technical Supplement Table 2, see ESM), FDA received only one substantially complete first applicant ANDA on the first date a PIV certification could be submitted. For the remaining 7 PIV drug markets, the number of substantially complete first applicant ANDAs received by FDA was greater than ten for three (13 for Zytiga [abiraterone acetate], 13 for Kerydin [tavaborole], and 29 for Tecfidera [dimethyl fumarate]) and between two and ten for the other four drugs. The average time from date of ANDA submission to final FDA approval was 60.7 months (range 9.5–119.0 months).

In the 37 PIV drug markets, 25 markets (68%) had a competing AG during the 180-day exclusivity period. This is consistent with related research, which found that, from 2010 to 2019, about 70.0% of AGs launched before or during the exclusivity period, thereby competing with FTF generics during the latter’s 180-day exclusivity period [18]. In addition, we also observe that five markets (14%) had multiple FTF generics that entered at different times during the 180-day exclusivity period.

Table 2 presents the coefficient estimates for the three models estimated by Eq. 3. The first model uses the total sample of PIV drugs (n = 37), the second model uses the subset of PIV drugs in which the FTF generic experienced a decline in sales from Month 6 to Month 7 (n = 25), and the third model uses the subset of PIV drugs in which the FTF generic experienced an increase in sales over the same period (n = 12). Not surprisingly, in the first two models, a higher number of generic entrants in Month 7 is associated with a greater decrease in FTF generic sales from Month 6 to Month 7.

The first model (Model 1(a), n = 37) shows that the FTF generic’s sales decrease by 8.3% (SE: 0.028) for each additional generic competitor (FTF and non-FTF combined) that enters the market after the 180-day exclusivity period. The presence of an AG in the market has a similar, but non-significant impact on the change in sales when examining all PIV drug markets; perhaps this is because about 70% of AGs launch during or before the FTF generics launch [18]. Similarly, the second model (Model 2(a), n = 25) shows that FTF generic sales decrease by 4.7% (SE: 0.018) for each additional competitor that enters after the 180-day exclusivity period. In the same model (Model 2(a)), in which PIV drugs have declining FTF generic sales, the regression shows a larger and highly significant 24.2% (SE: 0.067) decrease in sales for the FTF when an AG is present. None of the parameter estimates for the third model (Model 3(a)) were significant, owing in part to the small sample size (n = 12).

The number of FTF generics does not show any correlation to the change in FTF generic sales in any of the models. The model covering all 37 PIV drug markets (Model 1(a)) predicts that an FTF generic will experience a 13.0% reduction in sales from Month 6 to Month 7 in an average PIV drug market (calculated using the average values for AG = 0.65, NumFTF = 1.65, and NumEntrants = 2.84 for the estimated Model 1(a)) in Table 2). This finding is consistent with the descriptive statistics provided in Table 1. If there is no generic entrant after the exclusivity period, however, Model 1(a) predicts that this reduction in sales would be 3.1% on average (calculated using the average values for AG = 0.65, NumFTF = 1.65, and NumEntrants = 0 for the estimated Model 1(a) in Table 2), resulting in a 9.8% (13.0–3.1%) gain in sales that otherwise would have been lost to generic competitors. Thus, for the average FTF generic with around $8.9 million in sales in Month 6 in our sample (Technical Supplement Table 1, see ESM), the value of having one additional month of exclusivity would be approximately $870,000 ($8.9 million × 9.8%). Among the 37 PIV markets in our sample, about half (n = 18) had a generic competitor after Month 6 and the other half (n = 19) did not.

The average reduction in FTF generic sales from Month 6 to Month 7 in those 19 PIV markets that experienced competition from other generics after Month 6 (i.e., where NumEntrants >1 in Technical Supplement Table 1, see ESM) is 24.5%. For the 18 FTF generic markets that had no generic competitors in Month 7 (i.e., after the exclusivity period), our Model 1(a) predicts that reduction in sales would be 2.4% from Month 6 to Month 7 (calculated using the average values for AG = 0.63, NumFTF = 2.26, and NumEntrants = 0 for the estimated Model 1(a) in Table 2), resulting in a much larger (22.1% = 24.5−2.4%) gain in additional sales. For the average FTF generic in this subset, which has $15.1 million in sales in Month 6, the value of an additional month of exclusivity would be around $3.3 million ($15.1 million × 22.1%).

The average reduction in FTF generic sales from Month 6 to Month 7 in those 25 PIV markets where FTF generic sales declined after Month 6 is 27.7%. If no competitor generic enters the market after the exclusivity period, our Model 2(a) predicts that reduction in FTF generic sales would be 21.5% among this subset (calculated using the average values for AG = 0.60, NumFTF = 1.76, and NumEntrants = 0 for the estimated Model 2(a) in Table 2), Thus, the predicted percent gain in sales for the subset of PIV drugs with declining FTF generic sales from Month 6 to Month 7 (n = 25) is lower, at 6.2%. The average FTF generic in this subset has $11.4 million in Month 6 sales (Technical Supplement Table 1, see ESM), so the value of having one additional month of exclusivity would be approximately $707,000. Again, if we focus on those FTF generics with declining sales from Month 6 to Month 7 and that experienced competition from other generics in Month 7 (n = 16), our model predicts that extending exclusivity through Month 7 will show a 20.0% gain in FTF generic sales (calculated using the average values for AG = 0.56, NumFTF = 2.19, and NumEntrants = 0 for the estimated Model 2(a) in Table 2). In this subset, the average sales in Month 6 is $16.9 million, so the average value of an additional month of exclusivity would be about $3.4 million.

The associations discussed above are also observed when Month 7 sales are compared with the average of monthly sales for Months 1–6 of the FTF generic (see Table 2).