Premium
Drug innovation and price competition
Author(s) -
Dao Thi D.
Publication year - 1984
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090050205
Subject(s) - competitor analysis , competition (biology) , industrial organization , economics , microeconomics , biology , ecology , management
This study is designed to examine the relationship between drug innovation and price competition. The empirical results presented here support the hypothesis that new drugs‐as measured by new chemical entities‐exert downward pressure on the prices of existing competitors within the same therapeutic class. The implication of this finding for public policy is that drug innovation not only provides new therapy but also stimulates price competition.