Incremental innovation and competition in the french pharmaceutical market : Empirical analysis.

Summary This doctoral thesis focuses on understanding the competitive aspects of the incremental innovation market in France using an empirical approach. To this end, the analysis focuses on incremental innovation and the competitive dynamics of so-called "similar" drugs in France. The English-language literature uses the terms "me-too" or "follow-on" to define low-value-added pharmaceutical products with anatomical, therapeutic and chemical characteristics similar to those of previously marketed molecules. The first chapter focuses on the study of the market shares of follow-on drugs and the link with the strategic variable defined by the order of arrival on the market. In this chapter of the thesis, we verify that the first follow-on drugs of a therapeutic class have a competitive advantage in terms of their ability to capture and maintain market share over a long period. Furthermore, market share is positively correlated with the firm's ability to price above the first drug in the class. This strategic advantage of the first entrants is also intrinsically linked to the qualitative characteristics of the products since we have found that the market shares of the drugs are directly correlated with the level of innovation of the product. The second chapter of the thesis provides evidence on the price-competitive nature of the incremental pharmaceutical innovation market. Two dependent variables measuring price were considered: the price of the product calculated as the cost of the daily treatment and the price of the drug divided by the average price of similar drugs in the class. We verify that the latest entrants have a tendency to have a lower price than the first "follow-on" molecules. This implies a characterization of late entrants with less bargaining power with the regulator around the price, in particular due to a lower intrinsic innovative quality. The third chapter presents an empirical analysis of the confrontation between two emerging markets of major importance for the regulation of health systems: the generic market and the follow-on market. The analysis focuses on aspects of the intensity of competition in the market for similar patented drugs and its impact on the penetration of generic versions of the latter. The finding is that the intensity of similar drug competition is positively and significantly correlated with the introduction of generics. More follow-on products would therefore lead to an even greater decline in the prices of the generics of the last follow-on products in the therapeutic class. The essentially empirical approach of this doctoral thesis thus allows us to better understand the determinants and dynamics of this relatively emerging market, which is the subject of much debate within the scientific community. Finally, we conclude with a brief general conclusion based on the results of this research, which allows us to affirm that in a regulated market such as the one that prevails in France, the intensity of competition, generated in particular by the arrival on the market of "follow-on" drugs, can have positive consequences on the competitive aspects of the drug sector.