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Pharmaceutical followers

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

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 that generics and “me-too” drugs each increased consumer welfare more than $100million in 2010, holding insurance premiums constant. However, insurance payments in 2010 fell by nearly $1billion due to generics and rose by over $7billion due to me-too antiulcer drugs.

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Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 31 (2013)
Issue (Month): 5 ()
Pages: 538-553

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Handle: RePEc:eee:indorg:v:31:y:2013:i:5:p:538-553
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505551

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