The Pattern of Entry of Generic Drugs into the Brazilian Pharmaceutical Market

Abstract

The presence of generic drugs in a market is of great importance to the society as it increases competition between suppliers of such products, which can lead to a reduction in price of products already established in the market. In the late 90s there were relevant regulatory changes in the Brazilian pharmaceutical which allowed a gradual increase in the share of generic drugs in the domestic market. This paper aims to identify the entry pattern of suppliers of generic drugs in Brazil after the entry of the first generic manufacturer in the domestic market. Using a sample of 1228 observations with 148 different drugs (active ingredient), we estimate the relationship between the number of periods after the date of the first generic entry in Brazil and the amount generic’s suppliers for the same active ingredient in the market. We find that there was a continuous entry of generic’s suppliers on the market after the first generic entry. However, such an increase of suppliers occurs at decreasing rates.