‘Product differentiation and non-linear pricing: strategies for growth in the UK pharmaceutical market’

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.

Abstract

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.