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Pharmaceutical Followers

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  • Peter Arcidiacono
  • Paul B. Ellickson
  • Peter Landry
  • David B. Ridley

Abstract

We estimate a model of drug demand and supply that incorporates insurance, advertising, and competition between branded and generic drugs within and across therapeutic classes. We use data on antiulcer drugs from 1991 to 2010. Our simulations show generics and ``me-too'' drugs each increased consumer welfare more than $100 million in 2010, holding insurance premiums constant. However, insurance payments in 2010 fell by nearly $1 billion due to generics and rose by over $7 billion due to me-too antiulcer drugs.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19522.

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Date of creation: Oct 2013
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Publication status: published as Arcidiacono, Peter & Ellickson, Paul B. & Landry, Peter & Ridley, David B., 2013. "Pharmaceutical followers," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 538-553.
Handle: RePEc:nbr:nberwo:19522

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