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INNOVATION AND THE NORDIC ERYTHROPOIETIN MARKET

Sammendrag

We have estimated the demand for erythropoietin (EPO) using market data from the Scandinavian countries. Assuming that prices are set in a Nash-Bertrand game we determine the degree of competition in this Scandinavian market. We also report on the impact of product innovation on welfare, e.g on consumer (buyer) and producer surplus. The product innovation is the entry of Aranesp onto the Scandinavian market. We find a positive effect in the EPO market related to the introduction of Aranesp. However, the notable increase in expected consumer surplus does not seem to be accompanied by a corresponding increase in expected producer surplus. Some time after the introduction of the innovation, the total surplus does not seem to increase, remaining more or less constant. An important conclusion is that although there are few firms competing in the Scandinavian EPO market , the estimated long-run market power is rather low.

Om publikasjonen

Forfattere:

Sorisio, Enrico and Steinar Strøm

År:

2008

Tidsskrift:

Serie:

Andre tidsskrift

JEL:

C35, D43, I18, L11

Nøkkelord:

Discrete choice, demand for pharmaceuticals, monopolistic competition, erythropoietin, EPO

Prosjekt:

4111 - Government financing of drug consumption in Norway and the markets for pharmaceuticals

Lenke:

[PDF]