Robustness and Extensions Sample Clauses

Robustness and Extensions. Several other cases are relegated to the appendix but briefly discussed here. (1) We can incorporate the EU market entry rules in the model (see Appendix (A.3.3) for EU drug entry regulations). The main difference is that there is no explicit 180-days exclusivity period in Europe, and hence the outcomes would be similar to the ones depicted in the No Exclusivity case, i.e., an increase in parameter range over which pay-for-delay deals are possible. (2) We modified the model where exclusivity is made available to the first filer (FF) only instead of the first successful challenger (FSC). Once again the outcome is similar to the case of No Exclusivity as any later challenger cannot enjoy exclusivity benefits with the additional difference that the boundary between ‘Unchallenged Monopoly’ and ‘Pay Only First Generic’ shifts slightly downward (see Appendix (A.3.4)). (3) Our model is also robust to allowing for an incumbency advantage to the winning generic in post-patent period over other generics (see Appendix (A.3.5)). (4) Next, we also modified the payoff functions to allow for risk aversion by generic firms. Specifically, we modified the payoffs in the game tree to be exponential utility function of V˜ T # for generic firms. Details are given in the appendix, but the main differences in the agreement simulations are that while the threshold κ∗ values does not change, the required payments to keep the challengers out of the market decrease, thus making it easier for the branded firm to pay off all challengers, and hence shrink the zone in which deals are rejected (area marked as ‘IV No Deal, Litigation’ shrinks). Additionally, ceteris paribus, generics were now also less likely to challenge monopoly position of a branded firm for the same underlying value of patent strength π, thus increasing the area marked as ‘I - Unchallenged Monopoly’ (see results in Appendix (A.3.6)). (5) Finally, we also compare the short term consumer surplus associated with various outcomes in the appendix (see Appendix (A.3.7)).