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Pharmaceutical Followers

44 Pages Posted: 11 Oct 2013  

Peter Arcidiacono

Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Paul B. Ellickson

University of Rochester - Simon Business School

Peter Landry

University of Toronto - Rotman School of Management

David B. Ridley

Duke University - Fuqua School of Business

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Date Written: October 2013

Abstract

We estimate a model of drug demand and supply that incorporates insurance, advertising, and competition between branded and generic drugs within and across therapeutic classes. We use data on antiulcer drugs from 1991 to 2010. Our simulations show generics and ``me-too'' drugs each increased consumer welfare more than $100 million in 2010, holding insurance premiums constant. However, insurance payments in 2010 fell by nearly $1 billion due to generics and rose by over $7 billion due to me-too antiulcer drugs.

Suggested Citation

Arcidiacono, Peter and Ellickson, Paul B. and Landry, Peter and Ridley, David B., Pharmaceutical Followers (October 2013). NBER Working Paper No. w19522. Available at SSRN: https://ssrn.com/abstract=2338894

Peter Arcidiacono (Contact Author)

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Paul B. Ellickson

University of Rochester - Simon Business School ( email )

Rochester, NY 14627
United States

Peter Landry

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

David B. Ridley

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

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