IDEAS home Printed from https://ideas.repec.org/a/kap/revind/v25y2004i1p71-86.html
   My bibliography  Save this article

Pseudo-Generic Products and Barriers to Entry in Pharmaceutical Markets

Author

Listed:
  • Ying Kong

    (Department of Economics, The University College of Cariboo, Kamloops, BC, Canada V2C SN3. Tel.: +1-250-828-5000)

  • James R. Seldon

Abstract

This paper examines incentives for brand-name pharmaceutical producers to market pseudo-generic versions of their own branded products upon the expiry of patent protection.Using a two-stage game model, we determine that under plausible demand and cost conditions, brand-name incumbents can find it profitable to produce pseudo-generics as a means of blocking rivals' entry even when independent firms producing true generics face low entry costs.The model shows that social welfare can be higher when firms use pseudo-generics instead of capacity for entry deterrence as long as substitutability between brand-name and generic products is sufficiently high.

Suggested Citation

  • Ying Kong & James R. Seldon, 2004. "Pseudo-Generic Products and Barriers to Entry in Pharmaceutical Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 25(1), pages 71-86, August.
    • Handle: RePEc:kap:revind:v:25:y:2004:i:1:p:71-86
    as

    Download full text from publisher

    File URL: http://journals.kluweronline.com/issn/0889-938X/contents
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Giovanni B. Ramello, 2006. "What'S In A Sign ? Trademark Law And Economic Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 20(4), pages 547-565, September.
    2. Laurent Granier & S颡stien Trinquard, 2012. "Predation in off-patent drug markets," Applied Economics, Taylor & Francis Journals, vol. 44(17), pages 2171-2186, June.
    3. David Reiffen & Michael R. Ward, 2007. "'Branded Generics' as a strategy to limit cannibalization of pharmaceutical markets," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(4-5), pages 251-265.
    4. Vasco Rodrigues & Ricardo Gonçalves & Hélder Vasconcelos, 2014. "Anti-Competitive Impact of Pseudo-Generics," Journal of Industry, Competition and Trade, Springer, vol. 14(1), pages 83-98, March.
    5. Brekke, Kurt R. & Canta, Chiara & Straume, Odd Rune, 2016. "Reference pricing with endogenous generic entry," Journal of Health Economics, Elsevier, vol. 50(C), pages 312-329.
    6. Regan, Tracy L., 2008. "Generic entry, price competition, and market segmentation in the prescription drug market," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 930-948, July.
    7. Aidan Hollis, 2005. "How do Brands’ “Own Generics” Affect Pharmaceutical Prices?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(4), pages 329-350, December.
    8. Yunyun Wan, 2018. "Brand Loyalty and Generic Entry: Why Do Brand-Name Drug Companies Launch Their Own Generics?," The Japanese Economic Review, Springer, vol. 69(3), pages 340-346, September.
    9. Paul Grootendorst, 2007. "Effects of 'Authorized-Generics' on Canadian Drug Prices," Social and Economic Dimensions of an Aging Population Research Papers 201, McMaster University.
    10. de Vries, A.G.B. & Pennings, H.P.G. & Block, J.H., 2013. "Trademark or patent? The effects of market structure, customer type and venture capital financing on start-ups' IP decisions," ERIM Report Series Research in Management ERS-2013-002-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    11. Laurent Granier & Sébastien Trinquard, 2011. "Predation in Off-Patent Drug Markets," Post-Print hal-00687806, HAL.
    12. Giovanni B. Ramello, 2008. "Semiotica, diritti e mercato. Economia del marchio nel terzo millennio," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2008(1), pages 107-125.
    13. Ying Kong, 2009. "Competition between brand‐name and generics – analysis on pricing of brand‐name pharmaceutical," Health Economics, John Wiley & Sons, Ltd., vol. 18(5), pages 591-606, May.
    14. Farasat A. S. Bokhari & Franco Mariuzzo & Arnold Polanski, 2020. "Entry limiting agreements: First‐mover advantage, authorized generics, and pay‐for‐delay deals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(3), pages 516-542, July.
    15. Marjit, Sugata & Kabiraj, Tarun & Dutta, Arijita, 2009. "Strategic Under-utilization of Patents and Entry Deterrence: The Case of Pharmaceutical Industry," MPRA Paper 19157, University Library of Munich, Germany.
    16. Ricardo Gonçalves & Vasco Rodrigues & Hélder Vasconcelos, 2015. "Reference pricing in the presence of pseudo-generics," International Journal of Health Economics and Management, Springer, vol. 15(3), pages 281-305, September.
    17. Ying Kong & James Seldon, 2006. "Pseudo-Generic Products and Barriers to Entry in Pharmaceutical Markets: Reply," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(2), pages 189-193, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revind:v:25:y:2004:i:1:p:71-86. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.