Entry Deterrence and Mergers under Price Competition in Pharmaceutical Markets

Laurent Granier and Sébastien Trinquard
Additional contact information
Sébastien Trinquard: UNOCAM - Union nationale des organismes d'assurance maladie complémentaire - UNOCAM

Post-Print from HAL

Abstract: After patent expirations in pharmaceutical markets, brand-name laboratories are threatened by generic firms' entry. To fill the gap in the theoretical literature on this topic, we study brand-name firms' incentives either to deter entry, or to merge with the entrant. These strategies are considered along with the possibility of the brand-name firm producing its own generic drug, called a pseudo-generic drug. Using a vertical differentiation model with Bertrand-Stackelberg competition, we show that each strategy, merging and deterring entry, may be Nash equilibrium, according to the generic firm's setup cost level and to the rate of discount.

Keywords: Pharmaceutical Markets; Price Competition (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Published in Applied Economics, 2010, 42 (3), pp.297-309. ⟨10.1080/00036840701604495⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:halshs-00550455

DOI: 10.1080/00036840701604495

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().