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Anti-Competitive Impact of Pseudo-Generics

Author

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  • Vasco Rodrigues
  • Ricardo Gonçalves
  • Hélder Vasconcelos

Abstract

In pharmaceuticals markets, sellers of branded drugs sometimes sell generic versions of their own branded products, either directly or through license agreements. Although claims that these pseudo-generics may have anti-competitive effects are not unusual, the theoretical literature on this issue is limited and not conclusive. This paper uses a model that combines horizontal and vertical product differentiation, to explain how those effects may occur. We show that the producer of the branded product will not sell the pseudo-generic unless faced with competition and that, if she does so, in some circumstances, all prices rise to the benefit of all sellers and the detriment of consumers. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Vasco Rodrigues & Ricardo Gonçalves & Hélder Vasconcelos, 2014. "Anti-Competitive Impact of Pseudo-Generics," Journal of Industry, Competition and Trade, Springer, vol. 14(1), pages 83-98, March.
    • Handle: RePEc:kap:jincot:v:14:y:2014:i:1:p:83-98
    DOI: 10.1007/s10842-013-0154-0
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    References listed on IDEAS

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    Cited by:

    1. Ricardo Gonçalves & Vasco Rodrigues, 2018. "Reference Pricing with Elastic Demand for Pharmaceuticals," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(1), pages 159-182, January.
    2. Ricardo Gonçalves & Vasco Rodrigues & Hélder Vasconcelos, 2015. "Reference pricing in the presence of pseudo-generics," International Journal of Health Economics and Management, Springer, vol. 15(3), pages 281-305, September.

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    More about this item

    Keywords

    Pseudo-generics; Product differentiation; Pharmaceutical pricing; D43; L13; L44;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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