Anti-Competitive Impact of Pseudo-Generics
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
Volume (Year): 14 (2014)
Issue (Month): 1 (March)
|Contact details of provider:|| Web page: http://springerlink.metapress.com/link.asp?id=105724|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Schmalensee, 1978. "Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 305-327, Autumn.
- Laurent Granier & Sébastien Trinquard, 2012.
"Predation in Off-Patent Drug Markets,"
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
- Ward, Michael B. & Shimshack, Jay P. & Perloff, Jeffrey M. & Harris, J. Michael, 2002.
"Effects of the private-label invasion in food industries,"
22186, University Library of Munich, Germany.
- Michael B. Ward & Jay P. Shimshack & Jeffrey M. Perloff & J. Michael Harris, 2002. "Effects of the Private-Label Invasion in Food Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 961-973.
- Avinash Dixit, 1979.
"A Model of Duopoly Suggesting a Theory of Entry Barriers,"
Bell Journal of Economics,
The RAND Corporation, vol. 10(1), pages 20-32, Spring.
- Dixit, Avinash K., 1978. "A Model of Duopoly Suggesting a Theory of Entry Barriers," The Warwick Economics Research Paper Series (TWERPS) 125, University of Warwick, Department of Economics.
- Vasco Rodrigues, 2006. "Pseudo-Generic Products and Barriers to Entry in Pharmaceutical Markets: Comment," Review of Industrial Organization, Springer, vol. 28(2), pages 183-187, 03.
- Aidan Hollis, 2002. "The importance of being first: evidence from Canadian generic pharmaceuticals," Health Economics, John Wiley & Sons, Ltd., vol. 11(8), pages 723-734.
- Morton I. Kamien & Israel Zang, 1999. "Virtual Patent Extension by Cannibalization," Southern Economic Journal, Southern Economic Association, vol. 66(1), pages 117-131, July.
- Laurent Granier & Sebastien Trinquard, 2010. "Entry deterrence and mergers under price competition in pharmaceutical markets," Applied Economics, Taylor & Francis Journals, vol. 42(3), pages 297-309.
- Hay, D A, 1976. "Sequential Entry and Entry-Deterring Strategies in Spatial Competition," Oxford Economic Papers, Oxford University Press, vol. 28(2), pages 240-57, July.
- Ying Kong & James R. Seldon, 2004. "Pseudo-Generic Products and Barriers to Entry in Pharmaceutical Markets," Review of Industrial Organization, Springer, vol. 25(1), pages 71-86, 08.
- André Bonfrer & Pradeep K. Chintagunta, 2004. "Store Brands: Who Buys Them and What Happens to Retail Prices When They Are Introduced?," Review of Industrial Organization, Springer, vol. 24(2), pages 195-218, 03.
When requesting a correction, please mention this item's handle: RePEc:kap:jincot:v:14:y:2014:i:1:p:83-98. 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: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.