Generic Entry and the Pricing of Pharmaceuticals
Richard G. Frank and
David Salkever ()
Journal of Economics & Management Strategy, 1997, vol. 6, issue 1, 75-90
During the 1980s the share of prescriptions sold by retail pharmacies that was accounted for by generic products roughly doubled. The price response to generic entry of brand-name products has been a source of controversy. In this paper we estimate models of price responses to generic entry in the market for brand-name and generic drugs. We study a sample of 32 drugs that lost patent protection during the early to mid-1980s. Our results provide evidence that brand-name prices increase after generic entry and are accompanied by large decreases in the price of generic drugs. Copyright (c) 1997 Massachusetts Institute of Technology.
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Working Paper: Generic Entry and the Pricing of Pharmaceuticals (1995)
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