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Competition in the Pharmaceutical Industry: The Case of PAH Drugs

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  • Kevin Green

Abstract

The nature and extent of competition between different therapies for a given medical condition often is an important and controversial issue in both antitrust cases and general strategic analysis in the pharmaceutical industry. The market for pulmonary arterial hypertension ('PAH') therapies provides an interesting case study for analyzing these issues. An event study analyzing how the stock prices of PAH therapy providers respond to competitive developments in the industry sheds light on the nature of competition among different types of therapies. The results support the view that the strength of competition between any two drugs for the same condition can vary greatly depending on factors such as the stage of the patient's disease, the mode of drug delivery, the mechanism of action, convenience/ease of use and other characteristics.

Suggested Citation

  • Kevin Green, 2009. "Competition in the Pharmaceutical Industry: The Case of PAH Drugs," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 16(1), pages 55-71.
    • Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:55-71
    DOI: 10.1080/13571510802638932
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    References listed on IDEAS

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    1. Perloff, Jeffrey M. & Suslow, Valerie Y. & Seguin, Paul J., 1995. "Higher Prices from Entry: Pricing of Brand-Name Drugs," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt75g4k1nt, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Perloff, Jeffrey M. & Suslow, Valerie Y. & Seguin, Paul J., 1995. "Higher Prices from Entry: Pricing of Brand-Name Drugs," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt75g4k1nt, Department of Agricultural & Resource Economics, UC Berkeley.
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