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The importance of being first: evidence from Canadian generic pharmaceuticals

  • Aidan Hollis

    (Department of Economics, University of Calgary, Canada)

This paper uses pooled cross-section data on Canadian ethical drug sales to examine the effect of entry timing on sales of generic drugs. The data is for all drugs for which the first generic competitor entered during the years 1994-1997. It is found that the first generic entrant has a lasting competitive advantage: being first into the market appears to lead to an increase of around 30% in market share (among generics) over a period of at least 4 years. This finding has considerable implications for the current policy of allowing brandname drug companies to issue pseudo-generic equivalents as a preemptive strike against true generic competitors. Copyright © 2002 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.698
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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 11 (2002)
Issue (Month): 8 ()
Pages: 723-734

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Handle: RePEc:wly:hlthec:v:11:y:2002:i:8:p:723-734
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Danzon, Patricia M & Chao, Li-Wei, 2000. "Does Regulation Drive out Competition in Pharmaceutical Markets?," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 311-57, October.
  2. Jorge Mestre Ferrándiz, 1999. "The impact of generic goods in the pharmaceutical industry," Health Economics, John Wiley & Sons, Ltd., vol. 8(7), pages 599-612.
  3. Gorecki, Paul K., 1987. "Barriers to entry in the Canadian pharmaceutical industry : Comments, clarification and extensions," Journal of Health Economics, Elsevier, vol. 6(1), pages 59-72, March.
  4. McRae, James J. & Tapon, Francis, 1985. "Some empirical evidence on post-patent barriers to entry in the Canadian pharmaceutical industry," Journal of Health Economics, Elsevier, vol. 4(1), pages 43-61, March.
  5. Gorecki, Paul K., 1986. "The importance of being first : The case of prescription drugs in Canada," International Journal of Industrial Organization, Elsevier, vol. 4(4), pages 371-395, December.
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