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Does Increased Price Competition Affect Entry of New Pharmaceutical Products?

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Abstract

In October 2002 a substitution reform was introduced in the Swedish Pharmaceuticals market. In this note, the effects of increased price competition due to the reform on the entry of new pharmaceutical products were studied. The results show that the reform did affect the entry behavior of generic manufacturers as they became more prone to enter new package sizes into the market after the reform, but also that there is considerable heterogeneity in entry behavior between different ATC-code groups for both brand name and generic products.

Suggested Citation

  • Granlund, David & Rudholm, Niklas, 2009. "Does Increased Price Competition Affect Entry of New Pharmaceutical Products?," HUI Working Papers 26, HUI Research.
  • Handle: RePEc:hhs:huiwps:0026
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    More about this item

    Keywords

    pharmaceutical industry; generic competition; generic drugs; brand name drugs;

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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