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Eric Sun, Anupam Jena, Tomas Philipson , Darius Lakdawalla, Carolina Reyes, Dana Goldman
Keeping medicine accessible at a reasonable cost is a challenge. An important component of public authorities’ strategies has been to stimulate price competition from generics. Yet a perplexing feature surrounding generic entry is that the price of the other on-patent potential substitutes is barely affected (Jena et al. 2009, Lakdawalla 2018), and their volume market share even tends to increase (Grabowski et al. 2014, Lakdawalla and Philipson 2012, Castanheira et al. 2019). The absence of a price reaction on the part of drugs still benefitting from exclusivity has sometimes led competition authorities to conclude that a single molecule (and not the set of drugs that are used to treat the same condition) may constitute a distinct antitrust market. These findings stirred some controversy.