"Generic Entry and the Pricing of Pharmaceuticals"

24 Pages Posted: 19 Jun 2000 Last revised: 20 Sep 2014

See all articles by Richard G. Frank

Richard G. Frank

Harvard Medical School; National Bureau of Economic Research (NBER)

David S. Salkever

UMBC, Department of Public Policy

Date Written: October 1995

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

Suggested Citation

Frank, Richard G. and Salkever, David S., "Generic Entry and the Pricing of Pharmaceuticals" (October 1995). NBER Working Paper No. w5306. Available at SSRN: https://ssrn.com/abstract=225370

Richard G. Frank (Contact Author)

Harvard Medical School ( email )

Department of Health Care Policy
Boston, MA 02115
United States
617-432-0178 (Phone)
617-432-1219 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David S. Salkever

UMBC, Department of Public Policy ( email )

1000 Hilltop Circle
Baltimore, MD 21250

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