The interaction between leading drugs and pharmacy-owned labels in Chile

Gonzalo Escobar E. and Iván Valdés D.
Authors registered in the RePEc Author Service: Gonzalo Escobar Elexpuru

International Journal of Business Environment, 2023, vol. 14, issue 1, 67-93

Abstract: In this paper, a data panel technique to estimate a model of relative prices between large pharmacy-owned drugs and leading drugs was used. Under the assumption that dominant firm market share increases by 10%, and the other 2 (smaller ones) loss 5%, the relative prices diminish by -0.043%. The market size impacts positively (18.5%) the relative prices, implying that a larger market size the entry of more brands is encouraged, and then more competition and lower prices will be observed. This impacts the owned-brand price, which means that the leading drug price has a high degree of rigidity. For the drug specific effect - measures the drug that is targeted, the original or the leading generic - to commercialise its own brand, if the pharmacy targets the leading generic the variation of relative price between the own-brand drug and leading generic is 0.5267; which means that the owned-brand drug margin increases.

Keywords: drug markets; generic pharmaceuticals; microeconomics; competition. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbenv:v:14:y:2023:i:1:p:67-93

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