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Generic Entry and the Pricing of Pharmaceuticals

Generic Entry and the Pricing of Pharmaceuticals During the 1980s the share of prescriptions sold by retail pharmacies that was accounted for by generic products roughly doubled. The price response to generic entry of brand‐name products has been a source of controversy. In this paper we estimate models of price responses to generic entry in the market for brand‐name and generic drugs. We study a sample of 32 drugs that lost patent protection during the early to mid‐1980s. Our results provide evidence that brand‐name prices increase after generic entry and are accompanied by large decreases in the price of generic drugs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economics & Management Strategy Wiley

Generic Entry and the Pricing of Pharmaceuticals

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References (6)

Publisher
Wiley
Copyright
Copyright © 1997 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1058-6407
eISSN
1530-9134
DOI
10.1111/j.1430-9134.1997.00075.x
Publisher site
See Article on Publisher Site

Abstract

During the 1980s the share of prescriptions sold by retail pharmacies that was accounted for by generic products roughly doubled. The price response to generic entry of brand‐name products has been a source of controversy. In this paper we estimate models of price responses to generic entry in the market for brand‐name and generic drugs. We study a sample of 32 drugs that lost patent protection during the early to mid‐1980s. Our results provide evidence that brand‐name prices increase after generic entry and are accompanied by large decreases in the price of generic drugs.

Journal

Journal of Economics & Management StrategyWiley

Published: Mar 1, 1997

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