Generic Competition in the US Pharmaceutical Industry
We develop a simultaneous equations estimation framework to understand the interactions among generic entry, prices, and market shares. We base our estimates on a panel data sample of 40 brand-name drugs that first experienced generic competition during the period July 1992-January 1998. We find that generic share and price are simultaneously determined, while the number of generic entrants is a key determinant of generic market share and the generic-to-brand price ratio. In addition, we find generic competition to be particularly intense for blockbuster drugs, which experience significantly more generic entrants, price erosion, and generic penetration than other drugs.
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Volume (Year): 13 (2006)
Issue (Month): 1 ()
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