HAL : halshs-00537018, version 1

DOI : 10.1080/00036846.2011.562169

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Applied Economics 44, 17 (2012) pp. 2171-2186

Predation in Off-Patent Drug Markets

Laurent Granier 1, Sébastien Trinquard 2

(2012)

In 2009, Sanofi-Aventis, whose generic subsidiary is Winthrop, merges with the generic firm, Zentiva. This paper fills the gap in the theoretical literature concerning mergers in pharmaceutical markets. To prevent generic firms from increasing their market share, some brand-name firms produce generics themselves, called pseudo- generics. We develop a Cournot duopoly model by considering the pseudo-generics production as a mergers' catalyst. We show that a brand-name company always has an incentive to purchase its competitor. The key insight of this paper is that the brand-name laboratory can increase its merger gain by producing pseudo-generics beforehand. In some cases, pseudo-generics would not otherwise be produced and this production is then a predatory strategy.

1 :	Groupe d'analyse et de théorie économique (GATE Lyon Saint-Etienne)
	CNRS : UMR5824 – Université Lumière - Lyon II – École Normale Supérieure - Lyon
2 :	Union nationale des organismes d'assurance maladie complémentaire (UNOCAM)
	UNOCAM

Discipline

:

Sciences de l'Homme et Société/Economie et finances

Mots-Clés : Mergers – Pharmaceutical Market – Predation – Pseudo-Generics

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Soumis le : Mercredi 17 Novembre 2010, 14:53:02

Dernière modification le : Mardi 31 Janvier 2012, 09:31:49