Researcher ORCID Identifier
0009-0008-2735-2395
Graduation Year
2026
Date of Submission
4-2026
Document Type
Open Access Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Jessamyn Schaller
Terms of Use & License Information
Rights Information
2026 Kiara Jacob
Abstract
This paper examines how the number of generic competitors affects generic drug prices and whether generic markets exhibit a competition threshold beyond which additional entry produces little further price reduction. Using monthly NADAC price data and FDA Orange Book manufacturer records, I construct a molecule-month panel of 17 molecules across four therapeutic classes from 2013 to 2023, restricted to generic price observations. Fixed-effects regressions show that generic competition is associated with substantial price declines: each additional generic manufacturer is associated with a 7.2 log-point reduction in average acquisition price. The main threshold specification shows that prices are approximately 49 percent lower in markets with four to seven competitors, 72 percent lower with eight to fifteen competitors, and 81 percent lower with sixteen or more competitors, relative to markets with one to three competitors. These findings support the importance of early-stage entry but do not support a sharp ceiling at which additional generic entry becomes irrelevant. Instead, generic competition appears to reduce prices across the competitive distribution, suggesting that policy should prioritize timely entry in low-competition markets while recognizing that the size of these gains varies across therapeutic classes.
Recommended Citation
Jacob, Kiara, "Too Much of a Good Thing? Generic Entry, Drug Prices, and the Innovation Tradeoff" (2026). CMC Senior Theses. 4168.
https://scholarship.claremont.edu/cmc_theses/4168
