Entry in the ADHD Drugs Market: Welfare Impact of Generics and Me‐Too's

54 Pages Posted: 12 Jul 2013

See all articles by Farasat A. S. Bokhari

Farasat A. S. Bokhari

University of East Anglia (UEA) - School of Economic and Social Studies; University of East Anglia (UEA) - Centre for Competition Policy

Gary M. Fournier

Florida State University

Date Written: June 2013

Abstract

Recent decades have seen a growth in treatments for attention deficit hyperactivity disorder (ADHD) including many branded and generic drugs. In the early 2000's, new drug entry dramatically altered market shares. We estimate a demand system for ADHD drugs and assess the welfare impact of new drugs. We find that entry induced large welfare gains by reducing prices of substitute drugs, and by providing alternative delivery mechanisms for existing molecules. Our results suggest that the success of follow‐on patented drugs may come from unanticipated innovations like delivery mechanisms, a factor ignored by proposals to retard new follow‐on drug approvals.

Suggested Citation

Bokhari, Farasat A. S. and Fournier, Gary M., Entry in the ADHD Drugs Market: Welfare Impact of Generics and Me‐Too's (June 2013). The Journal of Industrial Economics, Vol. 61, Issue 2, pp. 339-392, 2013. Available at SSRN: https://ssrn.com/abstract=2292816 or http://dx.doi.org/10.1111/joie.12017

Farasat A. S. Bokhari (Contact Author)

University of East Anglia (UEA) - School of Economic and Social Studies ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom

University of East Anglia (UEA) - Centre for Competition Policy ( email )

UEA
Norwich Research Park
Norwich, Norfolk NR47TJ
United Kingdom

Gary M. Fournier

Florida State University ( email )

Tallahassee, FL 30306-2180
United States
850-5915239 (Phone)

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