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Price regulation and relative delays in generic drug adoption

Author

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  • Costa-Font, Joan
  • McGuire, Alistair
  • Varol, Nebibe

Abstract

Increasing the adoption of generic drugs has the potential to improve static efficiency in a health system without harming pharmaceutical innovation. However, very little is known about the timing of generic adoption and diffusion. No prior study has empirically examined the differential launch times of generics across a comprehensive set of markets, or more specifically the delays in country specific adoption of generics relative to the first country of (generic) adoption. Drawing on data containing significant country and product variation across a lengthy time period (1999–2008), we use duration analysis to examine relative delays, across countries, in the adoption of generic drugs. Our results suggest that price regulation has a significant effect on reducing the time to launch of generics, with faster adoption in higher priced markets. The latter result is dependent on the degree of competition and the expected market size.

Suggested Citation

  • Costa-Font, Joan & McGuire, Alistair & Varol, Nebibe, 2014. "Price regulation and relative delays in generic drug adoption," Journal of Health Economics, Elsevier, vol. 38(C), pages 1-9.
  • Handle: RePEc:eee:jhecon:v:38:y:2014:i:c:p:1-9
    DOI: 10.1016/j.jhealeco.2014.04.004
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Melisa Newham & Jo Seldeslachts & Albert Banal-Estañol, 2018. "Common ownership and market entry: Evidence from the pharmaceutical industry," Economics Working Papers 1612, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Birg, Laura, 2015. "Parallel trade and reimbursement regulation," Center for European, Governance and Economic Development Research Discussion Papers 253, University of Goettingen, Department of Economics.
    3. Joan Costa-Font, 2016. "Is medicines parallel trade ‘regulatory arbitrage’?," International Journal of Health Economics and Management, Springer, vol. 16(4), pages 321-336, December.
    4. Katharina Elisabeth Fischer & Tom Stargardt, 2016. "The diffusion of generics after patent expiry in Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(8), pages 1027-1040, November.
    5. Melissa Newham & Jo Seldeslachts & Albert Banal-Estanol, 2018. "Common Ownership and Market Entry: Evidence from Pharmaceutical Industry," Discussion Papers of DIW Berlin 1738, DIW Berlin, German Institute for Economic Research.
    6. Melissa Newham & Jo Seldeslachts & Albert Banal-Estañol, 2018. "Common Ownership and Market Entry: Evidence from the Pharmaceutical Industry," Working Papers 1042, Barcelona Graduate School of Economics.

    More about this item

    Keywords

    Generic competition; Regulation; Adoption; Duration analysis;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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