What is the specific relationship between the number of generic
entrants and the decline in price?  That is, how does the price
decline (from the original branded
drug price) as the number of generic alternatives increase?  I want to
know the percent decline for 1-6 generic entrants.  The references
and specific examples are important, too.  I would pay an additional
$50 for anyone that could give me examples of injectable drugs as the
examples.

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Request for Question Clarification by pafalafa-ga on 17 Nov 2005 12:14 PST

tcarl-ga,

You are assuming the price of the brand-drug declines, but this isn't
always the case.

Part of the dynamic seems to be that patients who are going to use
generics will do so, irrespective of the pricing strategy of the brand
name drug.

Those that remain loyal to the brand drug are insensitive to price,
and so the price doesn't fall (in fact, it often continues to rise)
even with a smaller customer base.

The biggest impact on prices of multiple generics seems to be on the
generics themselves -- the price of the generic drug falls rapidly as
more entrants come into the market.

That said, the data I've seen on pricing, generics, number of
entrants, etc. is not particularly current.  But I'm not aware of
recent analyses that directly address this topic.

Are you interested in some of the studies from the 1990's that can
shed light on the pricing dynamics of brand vs generic drugs?  If so,
I can post the details as an answer to your question.

Let me know what you think.


pafalafa-ga

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Clarification of Question by tcarl-ga on 18 Nov 2005 15:01 PST

It is the actual data and references that I am interested in.  I need
to draw a curve based on these data to predict how both the
marketshare and price fall as a function of the total number of
entrants.

Thanks.