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Can health insurance coverage explain the generic competition paradox?

  • Ferrara, Ida
  • Kong, Ying

In the context of a three-stage model with consumers differing in their health insurance coverage, the paper shows that there exist conditions under which the price of brand-name drugs increases following the entry of generic drugs.

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File URL: http://www.sciencedirect.com/science/article/B6V84-4S9P5KK-1/2/479c8e7ff89299afcbad84d7374d0011
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 101 (2008)
Issue (Month): 1 (October)
Pages: 48-52

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Handle: RePEc:eee:ecolet:v:101:y:2008:i:1:p:48-52
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Grabowski, Henry G & Vernon, John M, 1992. "Brand Loyalty, Entry, and Price Competition in Pharmaceuticals after the 1984 Drug Act," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 331-50, October.
  2. Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 75-90, 03.
  3. F. M. Scherer, 1993. "Pricing, Profits, and Technological Progress in the Pharmaceutical Industry," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 97-115, Summer.
  4. Nina Pavcnik, 2002. "Do Pharmaceutical Prices Respond to Potential Patient Out-of-Pocket Expenses?," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 469-487, Autumn.
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