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The Impact of Generic Drug Competition on Brand Name Market Shares – Evidence from Micro Data

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Abstract

This paper analyses how market shares for brandname drugs are affected by generic competition. The analysis is based onmicro data for twelve different original drugs, which are all subject togeneric competition. For five of these drugs, we find that the price of theoriginal relative to the average price of the generic substitutessignificantly affects the market share of the original drug. In addition,the introduction of a so called ``reference price'' system appears to havehad a significant impact on the market shares of five original drugs.

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Authors and Affiliations

  1. Department of Economics, Umeå University, SE-901 87, Umeå, Sweden

    Thomas Aronsson & Niklas Rudholm

  2. Swedish Competition Authority and The Research Institute of Industrial Economics, Box 5501, SE-114 85, Stockholm, Sweden

    Mats A. Bergman

Authors
  1. Thomas Aronsson
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  2. Mats A. Bergman
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  3. Niklas Rudholm
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Aronsson, T., Bergman, M.A. & Rudholm, N. The Impact of Generic Drug Competition on Brand Name Market Shares – Evidence from Micro Data. Review of Industrial Organization 19, 423–433 (2001). https://doi.org/10.1023/A:1012504310953

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