NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

"Generic Entry and the Pricing of Pharmaceuticals"

Richard G. Frank, David S. Salkever

NBER Working Paper No. 5306 (Also Reprint No. r2121)
Issued in October 1995
NBER Program(s):   HC

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 strong evidence that brand-name prices increase after entry and are accompanied by large price decreases in the price of generic drugs.

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Document Object Identifier (DOI): 10.3386/w5306

Published: Journal of Economics & Management Strategy, vol. 6, no. 1, pp. 75-90 Spring 1997. citation courtesy of

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