Anti-competitive impact of pseudo-generics

Vasco Rodrigues*, Ricardo Gonçalves, Hélder Vasconcelos

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

In pharmaceuticals markets, sellers of branded drugs sometimes sell generic versions of their own branded products, either directly or through license agreements. Although claims that these pseudo-generics may have anti-competitive effects are not unusual, the theoretical literature on this issue is limited and not conclusive. This paper uses a model that combines horizontal and vertical product differentiation, to explain how those effects may occur. We show that the producer of the branded product will not sell the pseudo-generic unless faced with competition and that, if she does so, in some circumstances, all prices rise to the benefit of all sellers and the detriment of consumers.
Original languageEnglish
Pages (from-to)83-98
Number of pages16
JournalJournal of Industry, Competition and Trade
Volume14
Issue number1
DOIs
Publication statusPublished - Mar 2014

Keywords

  • Pharmaceutical pricing
  • Product differentiation
  • Pseudo-generics

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