Anti-Competitive Impact of Pseudo-Generics

Vasco Rodrigues (), Ricardo Gonçalves and Helder Vasconcelos

Journal of Industry, Competition and Trade, 2014, vol. 14, issue 1, 83-98

Abstract: In pharmaceuticals markets, sellers of branded drugs sometimes sell generic versions of their own branded products, either directly or through license agreements. Although claims that these pseudo-generics may have anti-competitive effects are not unusual, the theoretical literature on this issue is limited and not conclusive. This paper uses a model that combines horizontal and vertical product differentiation, to explain how those effects may occur. We show that the producer of the branded product will not sell the pseudo-generic unless faced with competition and that, if she does so, in some circumstances, all prices rise to the benefit of all sellers and the detriment of consumers. Copyright Springer Science+Business Media New York 2014

Keywords: Pseudo-generics; Product differentiation; Pharmaceutical pricing; D43; L13; L44 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10842-013-0154-0

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