EconPapers    
Economics at your fingertips  
 

Market Concentration and Its Implications for Generic Drug Prices

Atanu Saha and Yong Xu

International Journal of the Economics of Business, 2025, vol. 32, issue 2, 139-155

Abstract: While many prior studies have focused on brand-generic drug price differences, we contribute to the literature by examining the competitive landscape and pricing within the generic pharmaceutical industry. We have analyzed the possible effects of rising levels of market concentration in this industry. Our results have shown that high levels of market concentration are associated with declining price discounts, which we define as the percent difference between WAC (list price) and NADAC (a proxy for price net of discounts). Using 500 top selling generic drugs’ prices at retail pharmacies, we demonstrate that while in the least concentrated markets the prices of the generic drugs have registered on average a year-over-year decline, in the most concentrated markets the opposite is true: the prices of generics have risen. These results exist even after controlling for drug-specific characteristics such as market size and therapeutic class. We estimate that the high degree of concentration in the generic industry is costing payers on average more than a billion dollars per month.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13571516.2025.2456136 (text/html)
Access to full text is restricted to subscribers.

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: https://EconPapers.repec.org/RePEc:taf:ijecbs:v:32:y:2025:i:2:p:139-155

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CIJB20

DOI: 10.1080/13571516.2025.2456136

Access Statistics for this article

International Journal of the Economics of Business is currently edited by Eleanor Morgan

More articles in International Journal of the Economics of Business from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2025-07-02
Handle: RePEc:taf:ijecbs:v:32:y:2025:i:2:p:139-155