Although personalized medicine is becoming the new paradigm to manage some diseases, the economics of personalized medicine have only focused on assessing the efficiency of specific treatments, lacking a theoretical framework analyzing the interactions between pharmaceutical firms and healthcare...

By introducing n (1) firms with infinite cross-price elasticity (i.e. generic drugs), we explore the effects of competition on the optimal pricing strategies under a Reference Pricing Scheme (RPS). A two-stage model repeated infinite number of times is presented. When stage 1 is competitive, the...