The FTC acknowledges that generic drugs play an important role in disciplining drug prices and controlling rising drug costs. But what impact does a generic drug's market entry have on the pricing of branded pharmaceuticals?

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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.

Read an abstract of this research.

Contact Atanu or Yong directly to learn more about their research findings.

About the Authors

Atanu Saha-HS

Atanu Saha

Atanu Saha, a Partner with StoneTurn, has over 25 years of experience in the application of economics and finance to complex business issues. He has served as an expert witness […]

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Yong Xu

Dr. Yong Xu, a Managing Director with StoneTurn, brings over 20 years of experience in the application of economics, finance, and statistics to complex business issues. He has provided expert […]

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