Mergers and Barriers to Entry in Pharmaceutical Markets

Abstract: After patent expirations in pharmaceutical markets, brand-name laboratories are threatened by generic firms' entry. To fill the gap in the theoretical literature on this topic, we study brand-name firms' incentives either to deter entry, or to merge with the entrant. These strategies are considered along with the possibility of the brand-name firm producing its own generic drug, called a pseudo-generic drug. Using a vertical differentiation model with Bertrand-Stackelberg competition, we show that each strategy, merging and deterring entry, may be Nash equilibrium, according to the generic firm's setup cost level and to the rate of discount

Object Details

• Location: Deutsche Nationalbibliothek Frankfurt am Main
• Extent: Online-Ressource
• Language: Englisch
• Notes: Postprint ; begutachtet (peer reviewed) ; In: Applied Economics ; 42 (2009) 3 ; 297-309

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Veröffentlichung
• (where): Mannheim
• (when): 2009
• Creator: Granier, Laurent ; Trinquard, Sébastien

Further information

• DOI: 10.1080/00036840701604495
• URN: urn:nbn:de:0168-ssoar-242012
• Rights: Open Access unbekannt; Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
• Last update: 25.03.2025, 1:48 PM CET