Michael A. Carrier ‘Sharing, Samples, and Generics: An Antitrust Framework’ (2017) Cornell Law Review 103(1) 1

This paper – which you can find here – looks at a specific type of obstacle to generic entry: refusals by originators to share samples of branded medicines. As is often the case in this sector, this practice takes advantage of the existing regulatory scheme, in this case in the US. This strategy involves risk-management programs known as Risk Evaluation and Mitigation Strategies (“REMS”). Pursuant to legislation, REMS are required when a drug’s risks (such as death or injury) outweigh its rewards. According to the author, brands have used this regime, intended to bring drugs to the market, to block generic competition. The paper is structured as follows: Part I provides a background on REMS, offering a history and overview of these programs before examining the concerns they raise regarding blocking generic entry. The FDA has defined REMS as “required risk management plans that use risk minimization strategies beyond the professional labeling to ensure that the benefits of certain prescription drugs outweigh…

Farasat Bokhari, Franco Mariuzzo and Arnold Polanski ‘Entry limiting agreements for pharmaceuticals: pay-for-delay and authorized generic deals’

This paper – which can be found here –  focuses on the incentives to enter into pay for delay agreements. A pay-for-delay deal involves a `reverse payment’ from a patent holder to a generic manufacturer (the challenger) seeking entry for its generic equivalent. In return for the payment, the generic firm may abandon its challenge, but often also acquires a right from the patent holder to enter the market at a later date, but before the patent expiration, as an authorized licensed generic with an exclusive license. The question is then, if the originator can pay the generic producer to refrain from challenging its patent and to stay out of the market for some time, how much do they have to pay, and why do other generic challengers not grab the same opportunity to also get paid off? The paper’s second section discusses the relevant literature. Section three develops a stylized game between a branded firm and several challengers seeking entry….

Kurt R. Brekkey, Chiara Cantaz, Odd Rune Straumex ‘Does Reference Pricing Drive Out Generic Competition in Pharmaceutical Markets? Evidence from a Policy Reform’ Discussion Paper Norwegian School of Economics 2015

This paper – which can be found here – conducts an empirical analysis of the impact of reference pricing on generic competition, and corresponding effects on drug prices, sales, and expenditures. A reference pricing scheme defines a maximum price that will be reimbursed by the insurer for a set of drugs with similar therapeutic effects. Consumers can purchase a drug priced above the reference price, but will then have to pay out-of-pocket the difference between the reference price and the actual drug price. The goal of reference pricing is to curb pharmaceutical expenditures by increasing demand elasticity and stimulating price competition between drug producers.  Reference pricing has become widely used. In Europe, almost every country has now introduced reference pricing schemes for off-patent drugs. In the US, reference pricing is a well-established practice through the Maximum Allowable Cost programs that are used by Medicaid and some managed-care programs to reimburse multi-source compounds. The impact of reference pricing on generic entry depends…

Fiona M. Scott Morton and Lysle T. Boller “Enabling Competition in Pharmaceutical Markets’ Hutchins Center Working Paper #30 (May, 2017)

This paper – which you can find here – argues that the pharmaceutical industry in the US has managed to disable many of the regulatory mechanisms that promote competition. The paper focuses on the incentives’ structure that enables the persistence of high prices, and its goal is to identify measures that will make US pharmaceutical markets competitive again. The author identifies three major barriers to effective competition in U.S. pharmaceutical marketsi. I. Obstacles to entry of biosimilars Over the past two decades, pharmaceutical innovation has shifted from chemically-synthesized small molecule drugs toward more complex, bioengineered treatments grown from living tissue that are known as biologics. While biologics carry a high price tag, many were licensed in the 1990s or early 2000s – which means that prices are high despite the relevant patents having expired. It is held that this is a consequence of regulatory barriers to competition being higher in biologic drug markets than elsewhere, resulting in fewer competitors and allowing…

Giuseppe Colangelo and Mariateresa Maggiolino ‘Big Data as a Misleading Facility’ (2017) European Competition Journal 13(2) 249

This paper – which you can find here – asks whether big data should be treated as an essential facility. Without getting into matters relating to accuracy, freedom of choice, pluralism, or even whether regulation is adequate, this paper simply explores whether and how antitrust law could impose a duty on dominant firms to share their big data. The paper is structured as follows: Section 2 seeks to debunk the current (antitrust) narrative about big data. To summarise, the argument is that while data is an important input, it is not that different from other inputs. Unlike what certain authors seem to hold: (i) the economic utility of big data does not depend on the data as such, but on the material and intellectual resources that a firm invests in developing the analytics necessary to draw reliable and grounded inferences out of that data; (ii) data is not a single input like oil, but is instead a concept that contains…

Mark Anderson and Max Huffman, ‘The Sharing Economy Meets the Sherman Act: Is Uber a Firm, a Cartel, or Something in Between?’ (2017) Columbia Business Law Review 859

This is a rather long piece – which you can find here – that tries to understand how antitrust should be applied in the context of the sharing economy. I think the spur for this piece is the recent price-fixing case brought against Uber in New York. Regardless of the incentives for writing the paper, it tries to identify the various approaches that antitrust can adopt regarding digital platforms and to determine which one is better suited. The paper also argues that: “Unique to sharing economy enterprises is a structure that approaches a single entity while remaining a set of agreements among individual actors. This structure results in a sharing of economic risks among the participants in a sharing economy enterprise which can incentivize efficiencies in operation that ordinarily are found in a single entity. The article concludes that those efficiencies can overcome anticompetitive concerns about coordination on competitively sensitive matters.” The paper begins by observing that: “antitrust law has…

Maurice Stucke and Ariel Ezrachi “Looking Up in the Data-Driven Economy’ (2017) CPI Chronicle May

This paper – which you can find here – argues that analyses of the impact of internet platforms on competition should not only take into account the behaviour of these platforms towards their consumers downstream, but also towards their input/content providers. The paper begins with the observation that U.S. antitrust policy (aside from cartel enforcement) has been plagued by a number of shortcomings. Competition has declined since the 1970s, along with the number of new businesses being created, while market and profit concentration have increased. There is a risk of these trends being reinforced by the emergence of big data and AI. This is not something which is inherent to these technological developments: big data and AI’s effects on society depend on how firms employ them, how markets are structured, and whether firms’ incentives are aligned with society’s interests. At times, big data and big analytics can promote competition and welfare by making information more easily available and by providing access to…

Frank Pasquale “When Antitrust Becomes Pro-Trust: The Digital Deformation of US Competition Policy” CPI ANTITRUST CHRON. (May 2017).

This paper – which can be found here – argue that “in digital industries in particular — such as search engines and social networks — U.S. merger review has been lax”. According to the author: “Massive digital platforms have exacerbated an old problem in American antitrust law — the tension between the efficiencies that mergers achieve in theory, and the pressure they inevitably create for firms in, or adjacent to, the industry of the merged firms, to themselves combine in order to better compete.” Problems are said to arise from adherence by antitrust enforcers to three myths that rationalize market power online: The Myth of Easy Platform Switching – This theory holds that consumers can and will easily shift from Google to Yahoo, or from Amazon to Barnes & Noble, or from Uber to Lyft. In reality, however, a long history of personalisation of results (through machine learning algorithms), network effects and lock-in make it hard to switch providers. The Myth of the…

Raphael De Conink ‘Innovation in EU Merger Control’ (2016) Competition Law & Policy Debate 2(3) 41

This paper – which can be found here – argues that these a consistent framework for taking account innovation is necessary in EU merger control. The article is structured as follows: Section 1 refers to recent Commission decisions addressing the impact of mergers on innovation. In particular, the Commission has been more interventionist in recent pharmaceutical mergers, such as in Novartis/GSK Oncology and in Pfizer/Hospira, and requested divestments of pipeline products – including, in some cases, products at an early stage of development. The Commission has also stressed the need to protect innovation as a rationale for divestment in other technology-driven industries, most recently and prominently in the context of the GE/Alstom. Section 2 summarises some of the economic evidence and debate on this topic. We are treated to a review of the literature on competition and innovation. There is a wealth of empirical analysis addressing the potential effects of competition on innovation. While the insights of such research do…

Reinhilde Veugelers ‘Innovation in EU merger control: Walking the talk’ Bruegel Policy Contribution 2012/04, February 2012

This relatively old paper – which can be found here – argues that the Commission makes all the right sounds on innovation, but it is not putting its “talk” into practice. Few cases have been actually examined for their innovation effects, and even in these few cases innovation effects have not been decisive for the ultimate competition assessments. In particular, verifiability seems to be a major constraint for DG COMP, preventing it from fully incorporating innovation effects into its analyses. The paper begins with a review of how the Commission took innovation claims into account in merger control assessments up until 2012. This section concludes that, while the Commission can take efficiencies into account as part of its substantive analysis of the consequences of a merger – usually to counterbalance perceived anti-competitive effects –, the evidence is that the Commission has made little use of this option. On the basis of the limited sample of cases where efficiencies were explicitly…