Journal of Industry, Competition and Trade

, Volume 14, Issue 1, pp 83–98 | Cite as

Anti-Competitive Impact of Pseudo-Generics

  • Vasco Rodrigues
  • Ricardo Gonçalves
  • Hélder Vasconcelos
Article

Abstract

In pharmaceuticals markets, sellers of branded drugs sometimes sell generic versions of their own branded products, either directly or through license agreements. Although claims that these pseudo-generics may have anti-competitive effects are not unusual, the theoretical literature on this issue is limited and not conclusive. This paper uses a model that combines horizontal and vertical product differentiation, to explain how those effects may occur. We show that the producer of the branded product will not sell the pseudo-generic unless faced with competition and that, if she does so, in some circumstances, all prices rise to the benefit of all sellers and the detriment of consumers.

Keywords

Pseudo-generics Product differentiation Pharmaceutical pricing 

JEL Classification

D43 L13 L44 

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  • Vasco Rodrigues
    • 1
  • Ricardo Gonçalves
    • 1
  • Hélder Vasconcelos
    • 2
  1. 1.Centro de Estudos de Economia e Gestão, Faculdade de Economia e GestãoUniversidade Católica PortuguesaPortoPortugal
  2. 2.Faculdade de EconomiaUniversidade do PortoPortoPortugal

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