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Pharmaceutical Followers

Author

Listed:
  • Peter Arcidiacono
  • Paul B. Ellickson
  • Peter Landry
  • David B. Ridley

Abstract

We estimate a model of drug demand and supply that incorporates insurance, advertising, and competition between branded and generic drugs within and across therapeutic classes. We use data on antiulcer drugs from 1991 to 2010. Our simulations show generics and ``me-too'' drugs each increased consumer welfare more than $100 million in 2010, holding insurance premiums constant. However, insurance payments in 2010 fell by nearly $1 billion due to generics and rose by over $7 billion due to me-too antiulcer drugs.

Suggested Citation

  • Peter Arcidiacono & Paul B. Ellickson & Peter Landry & David B. Ridley, 2013. "Pharmaceutical Followers," NBER Working Papers 19522, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19522 Note: HE IO
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    Cited by:

    1. Lee Branstetter & Chirantan Chatterjee & Matthew J. Higgins, 2014. "Starving (or Fattening) the Golden Goose?: Generic Entry and the Incentives for Early-Stage Pharmaceutical Innovation," NBER Working Papers 20532, National Bureau of Economic Research, Inc.
    2. repec:eee:touman:v:57:y:2016:i:c:p:323-333 is not listed on IDEAS
    3. Chatterjee, Chirantan & Kubo, Kensuke & Pingali, Viswanath, 2015. "The consumer welfare implications of governmental policies and firm strategy in markets for medicines," Journal of Health Economics, Elsevier, vol. 44(C), pages 255-273.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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