The first to file generics submits a substantially completed Abbreviated New Drug Application to receive marketing exclusivity for 180 days. Let us understand the concept better.
A generic drug is a pharmaceutical drug that is equivalent to a brand-name product in dosage, strength, route of administration, quality, performance and intended use. In most cases, generic products become available after the innovator’s patent expire.
“First generics” are the first approval by FDA which permits a manufacturer to market a generic drug product in the United States.
An important section of Hatch-Waxman Act actually encourages generic companies to challenge patents. If a generic company is the first to file its Abbreviated New Drug Application (ANDA) with a Paragraph IV certification and prevails in the subsequent lawsuit, that generic company is granted a period of market exclusivity of 180 days.
The 180-day exclusivity incentive can be significant for a generic company as it would be the only generic version on the market. So, it can price its product slightly below the branded version for six months, take market share from the branded product, and maintain its price point before other generics enter the market and erode the price and segment margins. The additional profit for a generic firm can be enormous if the product it challenges is a so-called blockbuster.