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Effects of Generic Entry on Market Shares and Prices of Originator Drugs: Evidence from Chinese Pharmaceutical Market

Author

Listed:
  • Weimiao Li

    (Peking University)

  • Xiaoyu Li

    (Peking University)

  • Yaoguang He

    (Peking University)

  • Luwen Shi

    (Peking University
    Peking University)

  • Jing Chen

    (Peking University
    Peking University)

Abstract

Objectives This article analyzes how market shares and prices for brand-name drugs are affected by generic competition in China. Methods Data were collected for originator drugs that experienced initial generic entry between 2006 and 2016 from China Medicine Economic Information (CMEI), a large database of drug procurement records covering 699 tertiary hospitals across 28 provinces in mainland China. Quarterly utilization and expenditure data were collected. We compared the change of market share and price of originator drugs eight quarters after the first generic entry. General linear regression was performed to analyze the factors that influence the market share and price of originator drugs. Results A total of 15 of 27 originator drugs maintained over 70% market share eight quarters after the first generic entry. In addition, 24 brand-name companies lowered prices with an average price decrease of 3% eight quarters after the first generic competitor appeared; prices for 3 drugs rose by an average of 0.62%. The median price ratio between originator and generic drugs was 1.76 when the first generic substitution entered, and the ratio became 2.00 eight quarters later. Regression showed that the number of generic manufacturers and time interval since the first generic entry exhibited a negative relation with the market share of originator drugs (P

Suggested Citation

  • Weimiao Li & Xiaoyu Li & Yaoguang He & Luwen Shi & Jing Chen, 2025. "Effects of Generic Entry on Market Shares and Prices of Originator Drugs: Evidence from Chinese Pharmaceutical Market," PharmacoEconomics - Open, Springer, vol. 9(4), pages 639-648, July.
    • Handle: RePEc:spr:pharmo:v:9:y:2025:i:4:d:10.1007_s41669-025-00570-6
    DOI: 10.1007/s41669-025-00570-6
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