The Trends of Drug Pricing After Entries of Generic Drugs

Yihao Yuan, Marketing Department, The Wharton School

Abstract: In pharmaceutical markets, there are evidences that after branded drugs lose patent exclusivity, the entries of first generic drug do not significantly bring the drug prices down. Instead, the prices could increase, especially for markets with small but inelastic demands. In this project, I would like to understand the competition on drug markets before and after generic entries, and quantify the welfare effects of generic entries.