Maceira DA; AcademyHealth. Meeting (2004 : San Diego, Calif.).
Abstr AcademyHealth Meet. 2004; 21: abstract no. 1342.
Center for the Study of the State and Society (CEDES), Health Economics, Sanchez de Bustamante 27, Buenos Aires, C1173AAA Tel. (54-11) 4861-2126 Fax 54.11.4862.0805
RESEARCH OBJECTIVE: The goal of this paper is to test the leader-follower model in the Argentinean pharmaceutical markets, where patent protection does not apply, allowing immediate entry and to compare these results with those obtained in the U.S. STUDY DESIGN: Recent literature on U.S. pharmaceutical markets shows that following patent expiration leaders raise their prices in response to generic entry. This price increase occurs due to two different patterns in consumer behavior: one group of consumers substitutes the brand product for cheaper ones, while a second group remains loyal to the original brand, which leader firms continue to supply. On average, prices fall with generic entry. POPULATION STUDIED: The data used in this study is based in information published by Pharmaceutical Markets Argentina (PMA), which was complemented with indicators of necessity and chronicity, obtained through interviews of physicians and pharmacologists, as well as,the list of chemical entities used in the production of each product, and the nationality of manufactures. PRINCIPAL FINDINGS: From the group of 88 therapeutic classes selected, 56 classes kept the same leader during the period 1988-1995, although just in nine of those cases the first entrant remains as market leader. The cases where market leader remains the same during the sample period but they were not necessarily the first entrants are defined as loose leadership markets, while cases of strict leadership are those where first entrants remained as market leaders during the sample period. CONCLUSIONS: Argentinean pharmaceutical markets are characterized by a rising trend in prices for the period 1988-1995, lower leader market shares than the U.S. case, and strong reputation factors. This study provides support for the existence of a leader-follower model, which allows market leaders to raise prices with entry, even without a period of exclusivity. Finally, estimations show that during the price control period there were strong incentives for the entry of new products.Additionally, results support the traditional hypothesis that positively relates domestic firms' ownership with higher prices. However, such behavior seems to differ depending on wether the domestic firms as a market leader or as one of the three main followers. IMPLICATIONS FOR POLICY, DELIVERY OR PRACTICE: These findings underscore the main controversy in Argentinean pharmaceutical markets: the lack of patents allows more competitive behavior among products, while at the same time provides more incentives to differentiate brands from each other
Publication Types:
Keywords:
- Argentina
- Biomedical Research
- Drugs, Generic
- Ownership
- Patents
- Research
- methods
- hsrmtgs
UI: 103624376
From Meeting Abstracts