Pharmaceutical industry’s changing market dynamics

Abstract Using a panel dataset of 82 drugs that lost exclusivity between 2009 and 2018, we examine three key variables: the number of generic entrants, the generic-to-brand price ratio, and generic share. We also undertake a comparative analysis of these variables using an earlier dataset of 40 drugs that lost exclusivity in 1992–1998. Our principal findings are: a marked decrease in the number of generic manufacturers per drug, higher generic concentration, and higher generic-to-brand price ratios in the more recent years. Despite higher generic-to-brand price ratios, however, the generics have garnered higher market share, reflecting their rising market power and the ongoing major structural changes in the pharmaceutical industry.