Heterogeneous Entry Costs Sample Clauses

Heterogeneous Entry Costs. A threat to the validity of our results is a difference in entry costs between insured and uninsured drugs, due to underlying differences in production technology, regulatory hurdles, or differences in the strategic responses of incumbents. For example, if insured products have higher entry costs, patent expiration would lead to less generic entry, and a smaller increase in quantity. (By itself, however, this would not explain why patent expiration leads to larger reductions in branded revenues for these drugs.) To test this hypothesis, we estimate the effect of patent expiration on generic market share, by type of drug. Results from this analysis are presented in Table 3 below.