Quality Regulation and Competition: Evidence from Pharmaceutical Markets

Clicks: 18
ID: 332032
2026
Free PDF
Article Quality & Performance Metrics
Overall Quality
Not rated
Combines reader engagement with the AI quality analysis. This article has not been analysed, so there is no overall score — reader engagement is measured and shown alongside.
AI Quality Assessment
Not analyzed
Readership in this journal
Emerging

Ranked #142 of 212 articles by views in The Review of Economic Studies

Most read Least read

Bar heights use a square-root scale. Only the 120 most-read articles are drawn; the journal has 212 in total.

Mint this article as an NFT
Not yet minted

Create a permanent, verifiable on-chain record of this article on the Scimatic Network. The NFT is held in your Journament account, and you can withdraw it to your own wallet at any time.

5 SUSD one-off · no wallet required
Sign in to mint
Abstract
Abstract Quality regulation seeks to ensure quality and foster competition by reducing vertical differentiation, but it may also have adverse effects on market structure. We study this trade-off in the context of pharmaceutical bioequivalence, which is the primary quality standard for generic drugs. By exploiting the introduction of bioequivalence in Chile, we find that stronger regulation reduced the number of drugs in the market by 18% and increased average paid prices by 13%. We estimate a model of drug entry, certification, and demand to study how drug quality, aversion to generics, and certification costs shape the equilibrium effects of quality regulation. We find that quality regulation increased demand for generic drugs by resolving asymmetric information and reducing aversion to unbranded generics, which induced the entry of high-quality drugs in place of low-quality drugs. Consumer welfare increased despite higher prices and a lower number of firms. We compare minimum quality standards with alternative designs of quality regulation, including quality disclosure.
Reference Key
openalex_W7221315976 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Juan Pablo Atal, José Ignacio Cuesta, Morten Sæthre
Are you one of these authors? Claim your profile
Journal The Review of Economic Studies
Year 2026
DOI
10.1093/restud/rdag113
URL
https://doi.org/10.1093/restud/rdag113
Keywords Keywords not found

Citations

No citations found. To add a citation, contact the admin at info@scimatic.org

Comments

No comments yet. Be the first to comment on this article.