‘Product differentiation and non-linear pricing: strategies for growth in the UK pharmaceutical market’
December 5, 2014 Leave a comment
The CCP seminar series continues on Friday 5th December, with pharma maestro Farasat Bokhari (CCP and ECO) presenting his research on ‘Product differentiation and non-linear pricing: strategies for growth in the UK pharmaceutical market‘. Farasat is an Associate Professor in the School of Economics and specialises in health economics, with a background in applied microeconomics and industrial organisation. An abstract for his paper can be found below.
This paper develops a stylized model to specify conditions for menu pricing and product differentiation as profitable strategies in a monopoly or duopoly market structure. We then empirically compare the effect of these strategies within the growth of firm literature. To this end, we use a quarterly panel dataset on the UK pharmaceutical market for the period Q2 2003 – Q1 2013 to estimate the impact of new product forms and package varieties on business unit. Using a dynamic lag-adjustment model as econometric framework, findings from this study suggest that a new product form leads to 18% growth in the long run, while a new package variety leads to 7% growth. Furthermore, in terms of growth, small and midsize firms benefit from these introductions far more than the larger firms.
The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.03.