Can Branded Drugs Benefit from Generic Entry? Switching to Non-Bioequivalent Molecules and the Role of Physician Response to Detailing and Prices

44 Pages Posted: 26 Jun 2007 Last revised: 29 Jul 2012

See all articles by Jorge Gonzalez

Jorge Gonzalez

IESE Business School, Barcelona, Spain

Catarina Sismeiro

Imperial College London, Tanaka Business School

Shantanu Dutta

University of Southern California - Marshall School of Business

Philip Stern

Loughborough University

Date Written: March 2008

Abstract

Patent expiration represents a turning point for the brand losing patent protection as bioequivalent generic versions of the drug quickly enter the market at reduced prices. In this paper, we study how physician characteristics and their prescribing decisions impact the competition among molecules of a therapeutic class, once generic versions of one of these molecules enter the market. Our results suggest that to understand the diffusion of generics in the category marketers should (1) determine the size of physician segments sensitive to marketing activity and prices, and (2) assess the marketing activity of all pharmaceutical firms, whether bioequivalent or not. We further discuss the managerial implications of our results.

Keywords: Generic entry, Pharmaceuticals, Heterogeneity, Competition

JEL Classification: D40, D21, C23, C25, C11, C13, I11, I18, L10, M30

Suggested Citation

Gonzalez, Jorge and Sismeiro, Catarina and Dutta, Shantanu and Stern, Philip, Can Branded Drugs Benefit from Generic Entry? Switching to Non-Bioequivalent Molecules and the Role of Physician Response to Detailing and Prices (March 2008). Available at SSRN: https://ssrn.com/abstract=996552 or http://dx.doi.org/10.2139/ssrn.996552

Jorge Gonzalez (Contact Author)

IESE Business School, Barcelona, Spain ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Catarina Sismeiro

Imperial College London, Tanaka Business School ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Shantanu Dutta

University of Southern California - Marshall School of Business ( email )

Hoffman Hall 701
Los Angeles, CA 90089-1427
United States
213-740-5038 (Phone)
213-740-7828 (Fax)

Philip Stern

Loughborough University ( email )

Loughborough, LE11 3TU
United Kingdom

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