The impact of generic substitution on price competition in Finland

Eur J Health Econ. 2008 May;9(2):185-91. doi: 10.1007/s10198-007-0059-0. Epub 2007 May 17.

Abstract

Generic substitution by pharmacists was introduced in April 2003 in Finnish pharmaceutical markets. This article examines the impact of generic substitution on price development. This study examined all of the 2,100 substitutable drugs in Finland. The impact of generic substitution on price competition was significant. The average price of substitutable drugs decreased by more than 10%. However, the price development was uneven; some prices increased whereas others decreased by more than 50%. The most important factors that influenced the price development were the number of competitors, whether the drug was originator or generic and the width of the price band.

MeSH terms

  • Commerce / economics
  • Drug Costs* / statistics & numerical data
  • Drug Industry / economics*
  • Drug Prescriptions / classification
  • Drug Prescriptions / economics*
  • Drugs, Generic / economics*
  • Economic Competition / economics
  • Enalapril / economics
  • Finland
  • Ibuprofen / economics
  • Models, Economic
  • Ranitidine / economics

Substances

  • Drugs, Generic
  • Enalapril
  • Ranitidine
  • Ibuprofen