TY - JOUR
T1 - Anti-competitive impact of pseudo-generics
AU - Rodrigues, Vasco
AU - Gonçalves, Ricardo
AU - Vasconcelos, Hélder
PY - 2014/3
Y1 - 2014/3
N2 - 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.
AB - 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.
KW - Pharmaceutical pricing
KW - Product differentiation
KW - Pseudo-generics
UR - http://www.scopus.com/inward/record.url?scp=84896401213&partnerID=8YFLogxK
U2 - 10.1007/s10842-013-0154-0
DO - 10.1007/s10842-013-0154-0
M3 - Article
AN - SCOPUS:84896401213
SN - 1566-1679
VL - 14
SP - 83
EP - 98
JO - Journal of Industry, Competition and Trade
JF - Journal of Industry, Competition and Trade
IS - 1
ER -