Graduation Year

2014

Document Type

Dissertation

Degree

Ph.D.

Degree Granting Department

Economics

Major Professor

Bradley P. Kamp

Co-Major Professor

Gabriel Picone

Keywords

European pharmaceutical industry, Hedonic regression, Panel data, Price competition, Pricing and reimbursement regulation

Abstract

The purpose of this dissertation is to examine the extent of competition between generic products and therapeutic substitutes under different regulatory regimes in the European Union

(EU) pharmaceutical industry. In particular, this study investigates generic competition among the five largest European pharmaceutical markets; the United Kingdom, Germany, France, Italy

and Spain, with comprehensive IMS data for 10 years (1994-2003), in order to estimate the effect of generic entry on drug prices at the product level. This analysis finds that generic entry

has a negative effect on prices in countries with free pricing originator market, whereas in EU countries with strict price and reimbursement regulation, generic competition is ineffective and/or counterproductive. Fewer generics and less competitive late entrants are consistent with incentives in regulated environments: low regulated prices for originator products discourage

generic entry following patent expiration. These findings suggest that regulation of both manufacturers' prices and retail pharmacy prices undermines price competition in the off-patent sector, and that budgetary savings from generic price competition are not realized in countries with strict regulatory systems.

Share

COinS