Profit-seeking behavior of medical providers and generic competition in the pharmaceutical market: Evidence from taiwan

Ya Ming Liu, Chee Ruey Hsieh

研究成果: Review article

摘要

Promoting competition between brand-name and generic drugs has long been recognized as an approach adopted to save on health care costs. However, there are substantial variations in the extent of the generic competition across countries. This study empirically estimates the determinants of the generic market share in Taiwan, where medical providers are in a position to profit directly from the sale of prescription drugs. Our empirical results point out that the profit-seeking behavior ofmedical providers plays an important and dominant role behind generic competition in the pharmaceutical market. As a result, there is a positive association between the generic-to-brand price ratio and the generic market share in Taiwan's pharmaceutical market, which contrasts with the conventional empirical finding that the relationship between the generic-to-brand price ratio and generic market share is negative. An important implication of our study is that the profit-seeking behavior of medical providers undermines the policy effectiveness of using generic competition as the cost containment strategy in the health care market.

原文English
頁(從 - 到)241-275
頁數35
期刊B.E. Journal of Economic Analysis and Policy
14
發行號1
DOIs
出版狀態Published - 2014 一月 1

指紋

Profit
Taiwan
Pharmaceutical market
Market share
Policy effectiveness
Brand names
Cost containment
Health care costs
Health care market
Empirical results
Generic drugs
Prescription drugs

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)

引用此文

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