Paper Trail: The Unexpected Consequences of Asymmetric Competition. An Application to Big Pharma

31 July 2017
Bryan Ray and Dr. Monica Lu

Dr. Lu and Mr. Ray reviewed the article, "The Unexpected Consequences of Asymmetric Competition. An Application to Big Pharma," by Micael Castanheira, Carmine Ornaghi, Georges Siotis, and Marie-Angeles. In the original article, the authors describe theoretical and empirical research that attempts to model and measure the effects of a situation that the authors refer to as an “asymmetric competition shock.” 

Dr. Lu and Mr. Ray concluded that the paper raises some interesting theoretical and empirical observations about how pharmaceutical markets may respond to generic drug entry. Of particular note, the authors’ findings implicate output effects from the launch of lower-priced generics and competition among therapeutic alternatives.