Patent protection, creative destruction, and generic entry in pharmaceuticals: Evidence from patent and pricing data

Alan C. Marco ()

No 83, Vassar College Department of Economics Working Paper Series from Vassar College Department of Economics

Abstract: This paper merges patent citation data with data on pharmaceutical patent expirations, generic entry, and pricing to explore the effects of observable patent characteristics on off-patent and on-patnet pharmaceutical pricing. Using a sample of drug patents facing generic entry in the 1990s, I find that the price of branded drugs increased on average in the face of generic entry. Importantly, I find that the number of patent citations that a drug receives from other firms is correlated with a decrease in markup and a decrease in the duration of the markup. Conversely, self-citations are correlated with higher prices and slower decay in prices. The results indicate that patent citations may signal the degree of inter-molecule substitution. And, importantly, self-citations may indicate a degree of cumulative patenting that enables a firm to effectively extend or strengthen the original patent protection. This research takes a step forward in understanding the distinction between “positive” citations and “negative” citations related to creative destruction.

New Economics Papers: this item is included in nep-com, nep-ent, nep-ino, nep-ipr and nep-tid
Date: 2006-11
View list of references

Downloads: (external link)
http://irving.vassar.edu/VCEWP/VCEWP83.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:vas:papers:83

Access Statistics for this paper

More papers in Vassar College Department of Economics Working Paper Series from Vassar College Department of Economics
Contact information at EDIRC.
Series data maintained by Sean Flynn ().