The Impact of Generic Drug Competition on Brand Name Market Shares – Evidence from Micro Data

This paper analyses how market shares for brandname drugs are affected by generic competition. The analysis is based onmicro data for twelve different original drugs, which are all subject togeneric competition. For five of these drugs, we find that the price of theoriginal relative to the average price of the generic substitutessignificantly affects the market share of the original drug. In addition,the introduction of a so called ``reference price' system appears to havehad a significant impact on the market shares of five original drugs.