EconPapers    
Economics at your fingertips  
 

Mergers and Barriers to Entry In Pharmaceutical Markets

Laurent Granier () and S. Trinquard

Cahiers du LASER (LASER Working Papers) from LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1

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 .rms.incentives either to deter entry, or to merge with the entrant. These strategies are considered along with the possibility of the brandname 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: barriers; endogenous mergers; limit pricing; pharmaceuticals; pseudo- (search for similar items in EconPapers)
JEL-codes: I11 L12 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2007
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-tid
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.laser.univ-montp1.fr/Cahiers/cahier210107.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.laser.univ-montp1.fr:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

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:mop:lasrwp:2007.21

Access Statistics for this paper

More papers in Cahiers du LASER (LASER Working Papers) from LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1 LASER, Faculté d'Economie, Avenue Raymond Dugrand, CS 79606, 34960 MONTPELLIER Cedex 2, France. Contact information at EDIRC.
Bibliographic data for series maintained by Jean-Christophe POUDOU ( this e-mail address is bad, please contact ).

 
Page updated 2022-11-27
Handle: RePEc:mop:lasrwp:2007.21