Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Brand Loyalty and Generic Entry: Why Do Brand-Name Drug Companies Launch Their Own Generics?

Brand Loyalty and Generic Entry: Why Do Brand-Name Drug Companies Launch Their Own Generics? Abstract Facing generic competition, brand-name drug companies sometimes launch their own generics called “authorised generics” (AGs) through a third-party entity. If that strategy works, an AG should be launched for every branded drug that comes off patent. This, however, contradicts the fact that only a small proportion of branded drugs have had AGs. To explain this puzzle, I develop a two-period model in which a brand-name drug company exploits its name brand before generic entry. The model predicts that the brand-name company launches an AG only when brand loyalty is sufficiently weak. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Japanese Economic Review Springer Journals

Brand Loyalty and Generic Entry: Why Do Brand-Name Drug Companies Launch Their Own Generics?

Wan, Yunyun
The Japanese Economic Review , Volume 69 (3): 7 – Sep 1, 2018
Download PDF
7 pages

Loading next page...
 
/lp/springer-journals/brand-loyalty-and-generic-entry-why-do-brand-name-drug-companies-1JYZcFyDKb

References (12)

Publisher
Springer Journals
Copyright
2018 Japanese Economic Association
ISSN
1352-4739
eISSN
1468-5876
DOI
10.1111/jere.12189
Publisher site
See Article on Publisher Site

Abstract

Abstract Facing generic competition, brand-name drug companies sometimes launch their own generics called “authorised generics” (AGs) through a third-party entity. If that strategy works, an AG should be launched for every branded drug that comes off patent. This, however, contradicts the fact that only a small proportion of branded drugs have had AGs. To explain this puzzle, I develop a two-period model in which a brand-name drug company exploits its name brand before generic entry. The model predicts that the brand-name company launches an AG only when brand loyalty is sufficiently weak.

Journal

The Japanese Economic Review – Springer Journals

Published: Sep 1, 2018

Keywords: economics, general; microeconomics; macroeconomics/monetary economics//financial economics; econometrics; development economics; economic history

There are no references for this article.