title: The impact of price-cap regulations on market entry by generic pharmaceutical firms.
abstract: BACKGROUND
  In 1998, the province of Ontario, Canada implemented price-cap '70/90' regulations: the first generic must be priced at ≤70% of the associated brand-name price and subsequent generics must be priced at ≤90% of the first generics' price. The price-cap was further lowered to 50% in 2006 and 25% in 2010 for all generic drugs regardless of the first or subsequent generic entrants. This study assessed the impact of such price-cap regulations on market entry by generic firms using the formulary database from 9 provinces (January 2004-March 2013).
  
  
  METHODS
  A logistic regression was estimated to compare the probability of entry during the three policy periods in Ontario ('70/90', '25', versus '50'). Since different price-caps were subsequently introduced in other provinces, Alberta, British Columbia, New Brunswick and Saskatchewan, difference-in-differences was used to compare market entry.
  
  
  RESULTS
  In Ontario, compared with the period '50', generic firms were 76% and 63% less likely to enter markets in the periods '25' and '70/90', respectively. The difference-in-differences showed that the entry probability decreased the most in Ontario during the '25' period from the '50' period.
  
  
  CONCLUSIONS
  Lowering the price-cap level to 25% leads to a significantly lower probability of market entry by generic firms.
authors.affiliation: a Centre for Health Evaluation and Outcome Sciences , St. Paul's Hospital, 588-1081 Burrard Street, Vancouver , BC , Canada.|b School of Population and Public Health , University of British Columbia , Vancouver , BC , Canada.
authors.forename: Wei
authors.initials: W
authors.lastname: Zhang
authors.affiliation: a Centre for Health Evaluation and Outcome Sciences , St. Paul's Hospital, 588-1081 Burrard Street, Vancouver , BC , Canada.
authors.forename: Huiying
authors.initials: H
authors.lastname: Sun
authors.affiliation: a Centre for Health Evaluation and Outcome Sciences , St. Paul's Hospital, 588-1081 Burrard Street, Vancouver , BC , Canada.
authors.forename: Daphne
authors.initials: D
authors.lastname: Guh
authors.affiliation: a Centre for Health Evaluation and Outcome Sciences , St. Paul's Hospital, 588-1081 Burrard Street, Vancouver , BC , Canada.|b School of Population and Public Health , University of British Columbia , Vancouver , BC , Canada.
authors.forename: Aslam H
authors.initials: AH
authors.lastname: Anis
mesh_terms: D002170:Canada; D003132:Commerce / Q000191:economics; D016208:Databases, Factual; D016527:Drug Costs / Q000331:legislation & jurisprudence*; D004345:Drug Industry / Q000191:economics* / Q000331:legislation & jurisprudence; D016568:Drugs, Generic / Q000191:economics*; D006291:Health Policy; D006801:Humans; D016015:Logistic Models; D009864:Ontario; D011336:Probability
chemical_list: D016568:Drugs, Generic
keywords: Canada; generic drugs; generic firms; market entry; price-caps