Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 274: The Impact of Generic Competition on Brand Name Market Shares: Evidence from Micro Data

Thomas Aronsson (), Mats A. Bergman () and Niklas Rudholm ()
Additional contact information
Thomas Aronsson: Department of Economics, Postal: University of Umeå, SE-901 87 Umeå, Sweden
Mats A. Bergman: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, SE-113 83 Stockholm, Sweden
Niklas Rudholm: Department of Economics, Postal: University of Umeå, SE-901 87 Umeå, Sweden

Abstract: This paper analyses how market shares for brand name drugs are affected by generic competition. The analysis is based on micro data for twelve different original drugs, which are all subject to generic competition. For five of these drugs, we find that the price of the original relative to the average price of the generic substitutes significantly affects the market share of the original. In addition, the introduction of a so called "reference price" system appears to have had a significant impact on the market shares of five original drugs.

Keywords: Pharmaceutical industry; patent expiration; micro data.

JEL-codes: I11; L65

21 pages, October 22, 1998

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