Skip to main content

Entry deterrence and mergers under price competition in pharmaceutical markets

Buy Article:

$51.63 plus tax (Refund Policy)

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.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840701604495

Affiliations: LASER-CREDEN, University of Montpellier I: CS 79706 34960, Montpellier Cedex 2, France

Publication date: February 1, 2010

More about this publication?
routledg/raef/2010/00000042/00000003/art00004
dcterms_title,dcterms_description,pub_keyword
6
5
20
40
5

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more