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

Abstract

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.