Determinants of generic entry in the regulated Taiwanese prescription drug market

Abstract

Objectives: This paper investigates the determinants of generic entry in the regulated Taiwanese prescription drug market, where physicians both prescribe and dispense drugs.

Methods: Using a sample of 29 ingredients and a population claim data set from 1997-2007, we employ the negative binomial regression to empirically examine the determinants of generic entry in Taiwan.

Results: This study finds that the lagged number of competitors, market size, and market share of large-scale medical providers affect generic entry.

Conclusions: The negative effect of large buyers on generic entry implies that rent-seeking behavior appears to create a barrier for generic manufacturers to enter into the Taiwanese prescription drug market.