Markups and Fixed Costs in Generic and Off-Patent Pharmaceutical Markets / Sharat Ganapati, Rebecca McKibbin.

Format:

Book

Author/Creator:

Ganapati, Sharat.

Contributor:

National Bureau of Economic Research.

McKibbin, Rebecca.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29206.

NBER working paper series no. w29206

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

There is wide dispersion in pharmaceutical prices across countries with comparable quality standards. Under monopoly, off-patent and generic drug prices are at least four times higher in the United States than in comparable English-speaking high income countries. With five or more competitors, off-patent drug prices are similar or lower. Our analysis shows that differential US markups are largely driven by the market power of drug suppliers and not due to wholesale intermediaries or pharmacies. Furthermore, we show that the traditional mechanism of reducing market power - free entry - is limited because implied entry costs are substantially higher in the US.

Notes:

Print version record

September 2021.