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The impacts of the rise of Paragraph IV challenges on startup alliance formation and firm value in the pharmaceutical industry

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  • Filson, Darren
  • Oweis, Ahmed

Abstract

Court decisions in 1998 encouraged generic producers to pursue Paragraph IV patent challenges. A follow-up decision in 2000 marked the first successful challenge involving a blockbuster and brought further attention to this pathway for generic entry. We consider the impacts of these decisions on R&D-based startups, and we focus on the propensity to form alliances as a primary channel of impact. We find substantial negative impacts on alliance formation and firm value, and only the first event's impacts are restricted to small molecules. The results suggest that policy analyses in settings with R&D-based startups should consider impacts on alliance formation.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 29 (2010)
Issue (Month): 4 (July)
Pages: 575-584

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Handle: RePEc:eee:jhecon:v:29:y:2010:i:4:p:575-584

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Web page: http://www.elsevier.com/locate/inca/505560

Related research

Keywords: Intellectual property rights Generic entry Innovation policy Event study Alliances;

References

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  13. Higgins, Matthew J., 2007. "The allocation of control rights in pharmaceutical alliances," Journal of Corporate Finance, Elsevier, vol. 13(1), pages 58-75, March.
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Cited by:
  1. repec:ind:iispdp:11-02 is not listed on IDEAS
  2. Hemphill, C. Scott & Sampat, Bhaven N., 2012. "Evergreening, patent challenges, and effective market life in pharmaceuticals," Journal of Health Economics, Elsevier, vol. 31(2), pages 327-339.

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