Generic entry and the pricing of pharmaceuticals

Richard G. Frank, David S. Salkever

Research output: Contribution to journalArticlepeer-review

Abstract

During the 1980s the share of prescriptions sold by retail pharmacies that was accounted for by generic products roughly doubled. The price response to generic entry of brand-name products has been a source of controversy. In this paper we estimate models of price responses to generic entry in the market for brand-name and generic drugs. We study a sample of 32 drugs that lost patent protection during the early to mid-1980s. Our results provide evidence that brand-name prices increase after generic entry and are accompanied by large decreases in the price of generic drugs.

Original languageEnglish (US)
Pages (from-to)75-90
Number of pages16
JournalJournal of Economics and Management Strategy
Volume6
Issue number1
DOIs
StatePublished - 1997

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation

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