Price competition in the chinese pharmaceutical market
AbstractWe study price competition between high-quality global products and low-quality local products in a developing country, i.e., China, Nearly all previous studies on pharmaceutical price competition focused on developed countries with bioequivalent generics. In China, local generic products are not bioequivalent and are deemed of lower quality, while global products in the same class are considered similar in quality and better substitutes. We hypothesize that local generic competition drives down local product price but not global product price. In addition, we hypothesize that therapeutic competition among similar global products lowers global product price. Our empirical results support both hypotheses. Number of local generic competitors has a significantly negative effect on local product price but no effect on global product price, while number of global therapeutic competitors has a significantly negative effect on global product price. Policy changes that encourage bioequivalent local products and accelerate global product approvals will enhance price competition in China. Copyright Springer Science + Business Media, LLC 2006
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal International Journal of Health Care Finance and Economics.
Volume (Year): 6 (2006)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=106603
Pharmaceutical price competition; Generic competition; Therapeutic competition; Pharmaceutical market in developing countries;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Patricia M. Danzon & Y. Richard Wang & Liang Wang, 2005.
"The impact of price regulation on the launch delay of new drugs-evidence from twenty-five major markets in the 1990s,"
John Wiley & Sons, Ltd., vol. 14(3), pages 269-292.
- Patricia M. Danzon & Y. Richard Wang & Liang Wang, 2003. "The Impact of Price Regulation on the Launch Delay of New Drugs - Evidence from Twenty-Five Major Markets in the 1990s," NBER Working Papers 9874, National Bureau of Economic Research, Inc.
- Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 75-90, 03.
- Danzon, Patricia M & Chao, Li-Wei, 2000. "Does Regulation Drive out Competition in Pharmaceutical Markets?," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 311-57, October.
- Michael Kremer, 2002. "Pharmaceuticals and the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 67-90, Fall.
- Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," NBER Working Papers 5306, National Bureau of Economic Research, Inc.
- Liu, Ya-Ming & Yang, Yea-Huei Kao & Hsieh, Chee-Ruey, 2012. "Regulation and competition in the Taiwanese pharmaceutical market under national health insurance," Journal of Health Economics, Elsevier, vol. 31(3), pages 471-483.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.