The impact of generic drug competition on brand name market shares - Evidence from micro data

This paper analyses how market shares for brand name drugs are affected by generic competition. The analysis is based on micro data for twelve differe nt original drugs, which are all subject to generic competition. For five o f these drugs, we find that the price of the original relative to the avera ge price of the generic substitutes significantly affects the market share of the original drug. In addition, the introduction of a so called "referen ce price'' system appears to have had a significant impact on the market sh ares of five original drugs.