Generic Substitution Effects on Firm Level Market Shares in the Finnish Beta Blocker Market 1997Q1-2007Q4

Mikael Linden

Department of Health and Social Management, University of Eastern Finland, Joensuu, Finland.

DOI: 10.4236/me.2013.412092                

Abstract

The firm level market structure of the Finnish beta blocker market in the period from 1997Q1 to 2007Q4 is analyzed with data analysis and with panel data regression methods. Four different market concentration measures are used. Although drug prices have decreased in response to the competition-enhancing generic substitution system which started on the 1st of March 2003, the firms’ observed market shares in the market have not decreased uniformly in the all market dimensions. At the drug substitution group level, policy change has led to more equal group share distributions both for the nominal sales shares and quantity sales shares compared to the pre-policy period. At the whole market level, nominal firm sales shares of the largest firms have increased during the policy era but quantity sales shares have declined. The results imply that the dominant firms’ nominal sale shares are augmented with firm-specific drug price setting power. The results challenge the European Union (EU) drug policy targeted to increase competition in the drug markets.

 

Keywords

Generic Substitution; Market Concentration; Inequality; Competition; Policy

Conflicts of Interest

The authors declare no conflicts of interest.

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