Using data on 78 branded drugs over an 11-year period, Drs. Atanu Saha and Yong Xu examine whether brand prices react to the onset of generic competition. Contrary to the findings of several prior academic studies, their economic analysis demonstrates that the rate of change of brand prices (both nominal and CPI-deflated) are significantly lower after generics enter the market.
In the International Journal of the Economics of Business, Drs. Saha and Xu document pricing changes in branded drugs just prior and just after generic market entry. The authors also analyze pricing activity in markets with an authorized generic and in ones with large pre-entry brand sales.