IDEAS home Printed from
   My bibliography  Save this article

`Me-Too' Innovation in Pharmaceutical Markets


  • Jena Anupam B

    () (Harvard Medical School)

  • Calfee John E.

    () (American Enterprise Institute)

  • Mansley Edward C

    () (U.S. Outcomes Research, Merck & Co., Inc.)

  • Philipson Tomas J

    () (University of Chicago)


Critics of me-too innovation often argue that follow-on drugs offer little incremental clinical value over existing pioneer products, while at the same time increasing health care costs. We examine whether consumers view follow-on and pioneer drugs as close substitutes or distinct clinical therapies. For five major classes of drugs, we find that large reductions in the price of pioneer molecules after patent expiration-which would typically lead to decreased consumption of strong substitutes-have no effect on the trend in demand for follow-on drugs. Our findings are likely unaffected by health insurance, competitive pricing of me-toos, marketing, and switching costs.

Suggested Citation

  • Jena Anupam B & Calfee John E. & Mansley Edward C & Philipson Tomas J, 2009. "`Me-Too' Innovation in Pharmaceutical Markets," Forum for Health Economics & Policy, De Gruyter, vol. 12(1), pages 1-21, November.
  • Handle: RePEc:bpj:fhecpo:v:12:y:2009:i:1:n:5
    DOI: 10.2202/1558-9544.1138

    Download full text from publisher

    File URL:
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:


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

    Cited by:

    1. Castanheira, Micael & Ornaghi, Carmine & Siotis, Georges, 2019. "Market definition in the pharmaceutical industry: a case of drugs hopping antitrust markets?," CEPR Discussion Papers 14035, C.E.P.R. Discussion Papers.
    2. Michael Mueller & Alexander Frenzel, 2015. "Competitive pricing within pharmaceutical classes: evidence on “follow-on” drugs in Germany 1993–2008," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(1), pages 73-82, January.
    3. McKellar Michael R. & Frank Matthew & Huskamp Haiden & Chernew Michael E., 2012. "The Value of Patent Expiration," Forum for Health Economics & Policy, De Gruyter, vol. 15(2), pages 1-13, November.
    4. Hostenkamp, Gisela, 2013. "Do follow-on therapeutic substitutes induce price competition between hospital medicines? Evidence from the Danish hospital sector," Health Policy, Elsevier, vol. 111(1), pages 68-77.
    5. Castanheira, Micael & de Frutos, Maria-Angeles & Ornaghi, Carmine & Siotis, Georges, 2017. "The Unexpected Consequences of Asymmetric Competition. An Application to Big Pharma," CEPR Discussion Papers 11813, C.E.P.R. Discussion Papers.
    6. John Rizzo & Richard Zeckhauser, 2009. "Generic script share and the price of brand-name drugs: the role of consumer choice," International Journal of Health Economics and Management, Springer, vol. 9(3), pages 291-316, September.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:fhecpo:v:12:y:2009:i:1:n:5. 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: (Peter Golla). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.