Advanced Search
MyIDEAS: Login

Generic entry, price competition, and market segmentation in the prescription drug market

Contents:

Author Info

  • Tracy L. Regan

    ()
    (Department of Economics, University of Miami)

Registered author(s):

    Abstract

    This paper studies the effects of generic entry on post-patent price competition for 18 prescription drugs recently exposed to competition. An independent, validating test of the “generic competition paradox” is conducted using a newly created data set. Each generic entrant is associated with an average 1% increase in the branded price. The one-way error component model accounts for intermolecular competition, market segmentation, and endogeneity of entry and finds branded prices increasing by 2%. Alternative definitions of entry suggest that price competition is confined to the generic market. The unique payer-type feature of the data offers empirical evidence supporting market segmentation.

    Download Info

    If 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.
    File URL: http://moya.bus.miami.edu/~tregan/Research09.html
    File Function: First version, 2009
    Download Restriction: no

    Bibliographic Info

    Paper provided by University of Miami, Department of Economics in its series Working Papers with number 2010-7.

    as in new window
    Length: 19 pages
    Date of creation: Aug 2007
    Date of revision:
    Publication status: Published
    Handle: RePEc:mia:wpaper:2010-7

    Contact details of provider:
    Postal: P.O. Box 248126, Coral Gables, FL 33124-6550
    Phone: (305) 284-5540
    Fax: (305) 284-2985
    Web page: http://www.bus.miami.edu/faculty-and-research/academic-departments/economics/index.html
    More information through EDIRC

    Related research

    Keywords: Generic entry; Price competition; Prescription drugs; Market segmentation; One-way error component model; EC2SLS;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

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

    Cited by:
    1. Joan Costa-i-Font & Nebibe Varol & Alistair McGuire, 2011. "Does pharmaceutical price regulation affect the adoption of generic competition?: evidence from the OECD, 1999-2008," LSE Research Online Documents on Economics 37537, London School of Economics and Political Science, LSE Library.

    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:mia:wpaper:2010-7. 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: (Christopher Parmeter).

    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.