Evolving market boundaries and competition policy enforcement in the pharmaceutical industry

Abstract Competition investigations start with market definition, which establishes the perimeter of competitive analysis. In this paper, we focus on definition economic markets in pharmaceutical industry, where entry generics different therapeutic areas provides a sequence quasi-natural experiments involving significant shock for originator producer. We show how generic modifies price and non-price constraints over time, generating market-wide effects. Paradoxically, may soften pressure brands other than originator. obtain these results by econometrically estimating time-varying elasticities. then apply logic Hypothetical Monopolist Test to gauge strength under structures. Our provide strong empirical support an approach that defines relevant contingent theory harm. discuss relevance findings context ongoing cases.