Generic Entry and the Pricing of Pharmaceuticals: An Analysis

Generic Entry and the Pricing of Pharmaceuticals: An Analysis

            The main topic of the study is the entry of generic drugs into the market and its effects to the pricing of pharmaceutical products - Generic Entry and the Pricing of Pharmaceuticals: An Analysis introduction. The goal of the study is to calculate approximately models of price responses to generic entry in the market for brand-name and generic drugs (Frank & Salkever 1). It has been stated in the study that the entry of generic drugs into the market during the 1980s caused the increase of prices for brand-name products. Hence, the period of analysis of the problem was made between the years 1979 and 1987.

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            In addition, the data sources of the study are carefully treated for better results. Between the years 1984 and 1987, there were 83 compounds known to dominate the market for competition in terms of usability and pricing. From this group of generic drugs, 45 products remained in the sample as elimination was done based on non-requirement of prescription upon purchase, as combination products, and quantity while being sold in the market (Frank & Salkever 1). The main findings of the study include the statement that further competition among generic drug producers is related to price reductions for those drugs and that, improved competition from generics is not accompanied by lower prices fro brand-name pharmaceutical products. In short, there is no evidence to prove that brand-name price reductions are associated with entry of generic producers.

            In this study, I learned that the cause of the renaissance of generic products was the time when the patents of many brand-name products were expired. The controversy gained attention of many policy-makers since it is considered alarming for the benefit of the price-insensitive buyers. Finally, it is my suggestion that the authors explain more on the findings of the study so that the readers will understand more of its relevance in the field of pharmaceutical marketing strategies.

Works Cited

Frank, Richard, & Salkever, David. “Generic Entry and the Pricing of Pharmaceuticals”.  Journal of Economics & Management Strategy. 6 (1997): 75-90.

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