() and Mats A. Bergman
David Granlund: Department of Economics, Umeå University, Postal: Department of Economics, Umeå University, S 901 87 Umeå, Sweden
Mats A. Bergman: Södertörn University, Postal: Department of Economics, Umeå University, S 901 87 Umeå, Sweden
Abstract: We study the short- and long-term price effects of the number of competing firms, using panel-data on 1303 distinct pharmaceutical markets for 78 months. We use actual transaction prices in an institutional setting with little scope for non-price competition and where simultaneity problems can be addressed effectively. In the long term, the price of generics is found to decrease by 81% when the number of firms selling generics with the same strength, form and similar package size is increased from 1 to 10. Nearly only competition at this fine-grained level matters; the price effect of firms selling other products with the same active substance, but with different package size, form, or strength, is only a tenth as large. Half of the price reductions take place immediately and 70% within three months. Also, prices of originals are found to react to competition, but far less and much slower.
28 pages, August 28, 2017
Full text files
Questions (including download problems) about the papers in this series should be directed to David Skog ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2018-01-23 23:38:50.