Advanced Search
MyIDEAS: Login to save this article or follow this journal

The impact of generic goods in the pharmaceutical industry

Contents:

Author Info

  • Jorge Mestre Ferrándiz

    (I.D.E.A., Department of Economics and Economic History, Universitat Aut�noma de Barcelona, Spain)

Registered author(s):

    Abstract

    This paper studies the effects of generic drugs in the pharmaceutical industry. Two firms produce two branded goods, with a different active ingredient, and the patent for one of them has expired, so that a generic alternative is in the market. This paper focuses on the case where the branded goods are perfect substitutes and where there exists a degree of differentiation between the branded and the generic goods. The study looks at whether the firm producing the branded good whose patent has expired has incentives to produce its own generic alternative too. For this purpose, the scenario where the firm producing the branded good also produces the generic drug is compared with the situation where the generic good is produced by a third firm. It is found that the firm producing the branded good has incentives to produce its generic alternative, owing to a market segmentation effect. This induces an increase in the price of the branded good produced by this firm, which in turn implies a welfare reduction. Copyright © 1999 John Wiley & Sons, Ltd.

    Download Info

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 8 (1999)
    Issue (Month): 7 ()
    Pages: 599-612

    as in new window
    Handle: RePEc:wly:hlthec:v:8:y:1999:i:7:p:599-612

    Contact details of provider:
    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

    Related research

    Keywords:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 6(1), pages 75-90, 03.
    2. Richard G. Frank & David S. Salkever, 1995. "Generic Entry and the Pricing of Pharmaceuticals," NBER Working Papers 5306, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Garcia Marinoso, Begona & Jelovac, Izabella & Olivella, Pau, 2011. "External referencing and pharmaceutical price negociation," Economics Papers from University Paris Dauphine, Paris Dauphine University 123456789/5987, Paris Dauphine University.
    2. Antonio Cabrales, 2003. "Pharmaceutical generics, vertical product differentiation and public policy," Working Papers, Research Center on Health and Economics, Department of Economics and Business, Universitat Pompeu Fabra 662, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Aidan Hollis, 2002. "The importance of being first: evidence from Canadian generic pharmaceuticals," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 11(8), pages 723-734.
    4. Lee G. Branstetter & Chirantan Chatterjee & Matthew Higgins, 2011. "Regulation and Welfare: Evidence from Paragraph IV Generic Entry in the Pharmaceutical Industry," NBER Working Papers 17188, National Bureau of Economic Research, Inc.
    5. Iván Moreno-Torres & Jaume Puig-Junoy & Joan-Ramon Borrell, 2009. "Generic Entry into the Regulated Spanish Pharmaceutical Market," Review of Industrial Organization, Springer, Springer, vol. 34(4), pages 373-388, June.
    6. Anna Merino, 2000. "The impact of the reference price system on the pharmaceutical market: A theoretical approach," Working Papers, Research Center on Health and Economics, Department of Economics and Business, Universitat Pompeu Fabra 524, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2003.
    7. Aidan Hollis, 2003. "The Anti-Competitive Effects of Brand-Controlled "Pseudo- Generics" in the Canadian Pharmaceutical Market," Canadian Public Policy, University of Toronto Press, University of Toronto Press, vol. 29(1), pages 21-31, March.
    8. Jorge Mestre-Ferrandiz, 2000. "Reference Prices: The Spanish Way," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 481.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    9. Anna Merino, 2000. "The impact of the reference price system on the pharmaceutical market: A theoretical approach," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 524, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2003.
    10. Gonzalez, Jorge & Sismeiro, Catarina & Dutta, Shantanu & Stern, Philip, 2006. "Market Effects of Generic Entry: The Role of Physicians and of Non-Bioequivalent Competitors," MPRA Paper 3717, University Library of Munich, Germany, revised May 2007.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:8:y:1999:i:7:p:599-612. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.