Generic Competition in the US Pharmaceutical Industry
International Journal of the Economics of BusinessPublished 1 February 2006
Atanu Saha, Henry G. Grabowski, Howard G. Birnbaum, RN, Oded Bizan
Citations147
SJR quartileQ2
SJR score0.47
SNIP0.82
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TL;DR
A simultaneous equations estimation framework to understand the interactions among generic entry, prices, and market shares finds generic competition to be particularly intense for blockbuster drugs, which experience significantly more generic entrants, price erosion, and generic penetration than other drugs.
Abstract
We develop a simultaneous equations estimation framework to understand the interactions among generic entry, prices, and market shares. We base our estimates on a panel data sample of 40 brand-name drugs that first experienced generic competition during the period July 1992-January 1998. We find that generic share and price are simultaneously determined, while the number of generic entrants is a key determinant of generic market share and the generic-to-brand price ratio. In addition, we find generic competition to be particularly intense for blockbuster drugs, which experience significantly more generic entrants, price erosion, and generic penetration than other drugs.
Keywords
Economics, Econometrics and Finance
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