What is loe?

LOE, or Loss of Exclusivity, refers to the point when a brand-name drug's patent or other exclusivity rights expire. This allows generic drug manufacturers to enter the market with their versions of the same drug, often at significantly lower prices. Here's a breakdown of key aspects:

• Patent Expiration: The primary driver of LOE is the expiration of a drug's patent. Patents typically last for 20 years from the date of filing, but the effective market exclusivity period is often shorter due to the time it takes to develop and gain regulatory approval for the drug. This is an important subject to research more: Patent Expiration

• Generic Entry: Once exclusivity is lost, generic manufacturers can launch their versions after receiving approval from regulatory bodies like the FDA (in the US). Generic drugs must demonstrate bioequivalence to the brand-name drug, meaning they deliver the same amount of active ingredient to the bloodstream at the same rate. Check this topic for more details: Generic Entry

• Price Erosion: The entry of generics typically leads to a significant drop in the price of the drug. This is because generic manufacturers don't have the same research and development costs as the brand-name company. Therefore, Price Erosion is an important effect of LOE.

• Market Share Shifts: As generics become available, they quickly gain market share due to their lower prices. The brand-name drug's market share typically declines significantly. Let's learn about the effects of Market Share Shifts.

• Impact on Pharmaceutical Companies: LOE has a significant impact on pharmaceutical companies that develop and market brand-name drugs. They lose a major source of revenue when their drugs face generic competition. They manage this through various strategies such as developing new drugs, extending patent protection, and authorized generics. More on Impact on Pharmaceutical Companies.

• Strategies to Mitigate LOE: Pharmaceutical companies employ several strategies to mitigate the impact of LOE, including developing follow-on products, securing additional patents (e.g., for new formulations or uses), and entering into agreements with generic manufacturers. To see some Strategies to Mitigate LOE.