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Anti-Competitive Impact of Pseudo-Generics

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Author Info

  • Vasco Rodrigues

    ()

  • Ricardo Gonçalves
  • Hélder Vasconcelos
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    Abstract

    In pharmaceuticals markets, sellers of branded drugs sometimes sell generic versions of their own branded products, either directly or through license agreements. Although claims that these pseudo-generics may have anti-competitive effects are not unusual, the theoretical literature on this issue is limited and not conclusive. This paper uses a model that combines horizontal and vertical product differentiation, to explain how those effects may occur. We show that the producer of the branded product will not sell the pseudo-generic unless faced with competition and that, if she does so, in some circumstances, all prices rise to the benefit of all sellers and the detriment of consumers. Copyright Springer Science+Business Media New York 2014

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    File URL: http://hdl.handle.net/10.1007/s10842-013-0154-0
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    Bibliographic Info

    Article provided by Springer in its journal Journal of Industry, Competition and Trade.

    Volume (Year): 14 (2014)
    Issue (Month): 1 (March)
    Pages: 83-98

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    Handle: RePEc:kap:jincot:v:14:y:2014:i:1:p:83-98

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    Web page: http://springerlink.metapress.com/link.asp?id=105724

    Related research

    Keywords: Pseudo-generics; Product differentiation; Pharmaceutical pricing; D43; L13; L44;

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    7. Laurent Granier & Sebastien Trinquard, 2010. "Entry deterrence and mergers under price competition in pharmaceutical markets," Applied Economics, Taylor & Francis Journals, vol. 42(3), pages 297-309.
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