"Generic Entry and the Pricing of Pharmaceuticals"

Frank, Richard G.; Salkever, David S.

doi:10.3386/w5306

Cited by 162 publications

(226 citation statements)

References 4 publications

Supporting

Mentioning

210

Contrasting

Unclassified

Order By: Relevance

“…While most empirical studies examining incumbent responses to entry focus on tactical changes such as adjusting prices, quality levels or production capacity (e.g., Lieberman 1987;Yamawaki 2002;Frank and Salkever 2004;Simon 2005;Seamans 2009), our theoretical analysis generates several predications related to firms' strategic decisions. Reduced-form regressions are more amenable than structural estimation to testing these predications for a couple of reasons.…”

Section: Empirical Implicationsmentioning

confidence: 99%

Strategies to Fight Ad-Sponsored Rivals

2010

View full text Add to dashboard Cite

We analyze the optimal strategy of a high-quality incumbent that faces a low-quality ad-sponsored competitor. In addition to competing through adjustments of tactical variables such as price or the number of ads a product carries, we allow the incumbent to consider changes in its business model. We consider four alternative business models, a subscription-based model, an ad-sponsored model, a mixed model in which the incumbent offers a product that is both subscription-based and ad-sponsored, and a dual model in which the incumbent offers two products, one based on the ad-sponsored model and the other based on the mixed business model. We show that the optimal response to an ad-sponsored rival often entails business model reconfigurations. We also find that when there is an ad-sponsored entrant, the incumbent is more likely to prefer to compete through the subscription-based or the ad-sponsored model, rather than the mixed or the dual model, because of cannibalization and endogenous vertical differentiation concerns. We discuss how our study helps improve our understanding of notions of strategy, business model, and tactics in the field of strategy.

show abstract

Section: Empirical Implicationsmentioning

confidence: 99%

Strategies to Fight Ad-Sponsored Rivals

2010

View full text Add to dashboard Cite

show abstract

“…As far as we know, few econometric estimations have been applied to the pharmaceutical sector in Brazil, with both attempting to measure the impact of the entry of generics on prices. Fiuza and Lisboa (2003) indicated that the prices of brand drugs would increase with an increase in the market power of similar ones, a similar result to that of Frank and Salkever (1997), but the database used was from prior to the Generics Act. Nishijima (2008) used a different sample (covering both the period prior to and the period after the Generics Act) and a different model from that of Fiuza and Lisboa (differences-in-differences) and obtained different results, in which the price of the reference drugs would fall in accordance with a greater number of generics.…”

Section: Introductionmentioning

confidence: 50%

The Pattern of Entry of Generic Drugs into the Brazilian Pharmaceutical Market

Barbosa¹,

Silva²

2017

Brazilian Review of Econometrics

View full text Add to dashboard Cite

The presence of generic drugs in a market is of great importance to society as it increases competition between suppliers of these products, which can lead to a reduction in the price of already established drugs. In the late 1990s there were relevant regulatory changes in the Brazilian pharmaceutical sector, which allowed for a gradual increase in the share of generic drugs in the domestic market. This paper aims to document the entry pattern of generic drug suppliers in Brazil after the arrival of the first generic manufacturer in the domestic market. Using a sample of 1228 observations involving 148 different drugs (active ingredients), we investigated the relationship between the number of periods after the arrival of the first generic drug supplier in Brazil and the number of suppliers of genetic drugs with the same active ingredient. We find that there was a continuous entry of generic suppliers after the first generic in the market. However, this increase in suppliers occurs at decreasing rates.

show abstract

“…28 This prevalence of generic drugs may discourage pharmaceutical innovations and developments in the future, possibly requiring the introduction of policies that extend the length of patent periods in order to encourage brand-name companies to continue producing new and innovative drugs. [28][29][30] Despite these drawbacks, the significantly lower prices of generic drugs in the US warrant consideration of the effects of government policy on pricing, and the benefits of fostering competition within the generic drug market.…”

Section: United Statesmentioning

confidence: 99%

“…However, with the repeal of these laws and the introduction of the Waxman-Hatch Act, generic drugs were made available to the public with prices driven down by consumer market forces. 28,29 Although there were several contributing factors, the Waxman-Hatch Act is attributed to the progressive shift in the increased prescription of generic drugs, from 10 percent in the early 1980s to approximately 40 percent in the 1990s. 29 It is important to examine the Waxman-Hatch Act from numerous angles, including the effects of generic drug sales on drug innovations.…”

Section: United Statesmentioning

confidence: 99%

“…28,29 Although there were several contributing factors, the Waxman-Hatch Act is attributed to the progressive shift in the increased prescription of generic drugs, from 10 percent in the early 1980s to approximately 40 percent in the 1990s. 29 It is important to examine the Waxman-Hatch Act from numerous angles, including the effects of generic drug sales on drug innovations. While the introduction of the Waxman-Hatch Act has been advantageous in increasing generic drug sales, its introduction has also caused brand-name pharmaceuticals with expired patents to lose over 50 percent in sales during the first few months of generic drug competition.…”

Section: United Statesmentioning

confidence: 99%

See 1 more Smart Citation

A Global Comparison Between Brand-Name and Generic Drugs

Chawla¹,

Tofighi²,

Agarwal³

et al. 2014

IJOPP

View full text Add to dashboard Cite

While the use of cheaper bioequivalent generic drugs over brand-name drugs has been widely discussed in literature, their market pricing and subsequent use is largely shaped by government policy-making as well as consumer and corporate decision-making. Analysis of literature shows that drug development and testing costs, degree of health care privatization, and pharmaceutical reimbursement all impact the profitability of brand-name drugs within and beyond their patent period. Furthermore, jurisdiction-specific government controls and policies influence the affordability and accessibility of both drug variants. This literature review focuses on: a) analyzing the policies and expenses associated with gaining approval for brand-name and generic drugs, and their subsequent influence on drug pricing; and b) comparing and contrasting government controls and policies between Canada, the United States, European nations, and developing countries.

show abstract

"Generic Entry and the Pricing of Pharmaceuticals"

Cited by 162 publications

References 4 publications

Strategies to Fight Ad-Sponsored Rivals

Strategies to Fight Ad-Sponsored Rivals

The Pattern of Entry of Generic Drugs into the Brazilian Pharmaceutical Market

A Global Comparison Between Brand-Name and Generic Drugs

Contact Info

Product

Resources

About