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A Deeper Analysis on Pharmaceutical Submarket Concentration: the US market in 1987-1998

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  • Francesca DI IORIO
  • Maria Letizia GIORGETTI

Abstract

We investigate the impact of submarket concentration on launches of new products in the US pharmaceutical 3 digit submarkets during the period 1987-1998. In addition to the typical specification of entry- exit standard reduced form models, we introduce additional decision drivers from data on submarkets, including concentration, company size relative to incumbent firms and the number of competing products. The estimates of a logit model, based on company panel data for various submarkets measured yearly, show that a concentrated industry at submarket level is a barrier to entry.

Suggested Citation

  • Francesca DI IORIO & Maria Letizia GIORGETTI, 2017. "A Deeper Analysis on Pharmaceutical Submarket Concentration: the US market in 1987-1998," Departmental Working Papers 2017-02, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2017-02
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    References listed on IDEAS

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    More about this item

    Keywords

    Submarket concentration; Pharmaceuticals; Product launches; Logit;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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