First Filer (FF) Exclusivity Sample Clauses

First Filer (FF) Exclusivity. In the main model, we have assumed that the exclusivity is made available to the first successful challenger (FSC) rather than the first filer (FF). We now consider the case when exclusivity is available to only first filer to validate our claim that under such a system, pay-for-delay deals are permissible under a much larger range of model parameters. In this case if the jth firm wins the litigation, its entry is still blocked if AG is launched (since the first generic has the exclusivity). Thus if the AG is launched the profit for the first generic changes from (ΠT1 + δΠT0) to (ΠD1 + δΠT0) plus X1 payment and minus licensing fee in both cases while 1 1 1 1 2 the payoff for the winning challenger changes from (ΠT1 + δΠT0/(J − 1)) to (0 + δΠT0/(J − 1)). If however the AG is not launched (post a win by the jth generic) then exclusivity is lost to all due to the forfeiture clause in Medicare Modernization Act of 2003, and the winning challenger and remaining firms enter immediately. In this case the payoff for the jth firm is ΠT0 + δΠT0 and of the remaining generics without P4D deals is ΠT0/(J − j + 1) + δΠT0/(J − 1). The payoffs in the Γj,G subgame are modified as shown in Figure A-8 below for the case when a win by the jth generic implies that either the exclusivity is available to only the first generic (where it is launched as an AG) and the winning jth generic cannot enter in period one, or exclusivity is not available to anyone if the first generic does not enter (forfeiture clause), in which case the jth challenger and all the remaining firms can enter immediately. Figure A-8. Γj,G Under FF Exclusivity The outcomes (and logic) in this case is similar to the No Exclusivity case, where the expected profit of the jth challenger reduces from (ΠT1 + δΠT0/(J − 1)) to (0 + δΠT0/(J − 1)) if an AG is launched making it easier to pay off this challenger. The only difference we observe in the corresponding figures is that boundaries between the regions shown in Figure 3 shift downwards, indicating that P4D deals are available over a larger parameter space (and hence for brevity the figure is omitted).
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