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The unexpected consequences of generic entry

Micael Castanheira (), Carmine Ornaghi and Georges Siotis

Journal of Health Economics, 2019, vol. 68, issue C

Abstract: Generic drugs are sold at a fraction of the original brand price. Yet, generic entry typically produces a drop in the quantity market share of the molecule losing exclusivity. This effect is economically and statistically significant for a large dataset covering hundreds of prescription drugs sold in the US during the period 1994Q1–2003Q4. This paper proposes the first systematic analysis of what appears to be a market anomaly.

Keywords: Non-price competition; Pharmaceutical industry; Generic entry; Consumer choice (search for similar items in EconPapers)
JEL-codes: D22 I11 L13 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:68:y:2019:i:c:s0167629618305332

DOI: 10.1016/j.jhealeco.2019.102243

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Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

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