Title: Pseudo-generics and the generic competition paradox in a universal healthcare's prescription drug market

Authors: Kenichi Ohkita

Addresses: Graduate School of Management, Kagawa University, 2-1 Saiwai-cho, Takamatsu, Kagawa, 760-8523, Japan

Abstract: This paper uses game theory to analyse the likelihood of the generic competition paradox in a universal healthcare's prescription drug market with and without the availability of a pseudo-generic. It is found that under certain conditions the price of the brand-name drug increases after patent expiry. The generic competition paradox is found to require full market coverage and to be more likely to occur with a larger difference in the perceived quality of the brand-name drug and its generic alternatives, higher marginal costs of production, or lower insurance coverage.

Keywords: generic competition paradox; GCP; brand-name drugs; pseudo-generic drugs; universal healthcare; prescription drugs; pseudo-generics; prescription drug markets; game theory; patent expiry; perceived quality; marginal costs; production costs; insurance coverage.

DOI: 10.1504/IJBG.2016.077569

International Journal of Business and Globalisation, 2016 Vol.17 No.1, pp.111 - 122

Received: 04 Jul 2015
Accepted: 06 Jul 2015
Published online: 06 Jul 2016 *

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