Generic and branded pharmaceutical pricing: Competition under switching costs
This article examines pricing in pharmaceutical markets where branded products face competition from generics. After providing evidence for brand premia and switching costs using prescription-level and matched socioeconomic data for the entire Swedish population, I estimate a dynamic oligopoly model...
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2023
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sg-smu-ink.soe_research-36802023-07-14T05:00:03Z Generic and branded pharmaceutical pricing: Competition under switching costs JANSSEN, Aljoscha This article examines pricing in pharmaceutical markets where branded products face competition from generics. After providing evidence for brand premia and switching costs using prescription-level and matched socioeconomic data for the entire Swedish population, I estimate a dynamic oligopoly model and evaluate counterfactual policies that reduce the impact of frictions on pricing. Lengthening the procurement period reduces the impact of switching costs on prices. The policy increases prices on average, but more so for individuals with infrequent consumption, high education and income. In a counterfactual where brand choice decisions are moved from patients to medical experts, prices fall substantially. 2023-07-01T07:00:00Z text https://ink.library.smu.edu.sg/soe_research/2681 info:doi/10.1093/ej/uead021 Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University Drugs pharmaceutical industry counterfactual policies pricing Sweden Behavioral Economics Health Economics Pharmacy and Pharmaceutical Sciences |
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Singapore Management University |
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SMU Libraries |
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Asia |
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Singapore Singapore |
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SMU Libraries |
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InK@SMU |
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English |
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Drugs pharmaceutical industry counterfactual policies pricing Sweden Behavioral Economics Health Economics Pharmacy and Pharmaceutical Sciences |
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Drugs pharmaceutical industry counterfactual policies pricing Sweden Behavioral Economics Health Economics Pharmacy and Pharmaceutical Sciences JANSSEN, Aljoscha Generic and branded pharmaceutical pricing: Competition under switching costs |
| description |
This article examines pricing in pharmaceutical markets where branded products face competition from generics. After providing evidence for brand premia and switching costs using prescription-level and matched socioeconomic data for the entire Swedish population, I estimate a dynamic oligopoly model and evaluate counterfactual policies that reduce the impact of frictions on pricing. Lengthening the procurement period reduces the impact of switching costs on prices. The policy increases prices on average, but more so for individuals with infrequent consumption, high education and income. In a counterfactual where brand choice decisions are moved from patients to medical experts, prices fall substantially. |
| format |
text |
| author |
JANSSEN, Aljoscha |
| author_facet |
JANSSEN, Aljoscha |
| author_sort |
JANSSEN, Aljoscha |
| title |
Generic and branded pharmaceutical pricing: Competition under switching costs |
| title_short |
Generic and branded pharmaceutical pricing: Competition under switching costs |
| title_full |
Generic and branded pharmaceutical pricing: Competition under switching costs |
| title_fullStr |
Generic and branded pharmaceutical pricing: Competition under switching costs |
| title_full_unstemmed |
Generic and branded pharmaceutical pricing: Competition under switching costs |
| title_sort |
generic and branded pharmaceutical pricing: competition under switching costs |
| publisher |
Institutional Knowledge at Singapore Management University |
| publishDate |
2023 |
| url |
https://ink.library.smu.edu.sg/soe_research/2681 |
| _version_ |
1772829221250400256 |