How US Antitrust Can Go Astray: The Brand Name Prescription Drug Litigation
AbstractThis paper analyzes the substantive issues in a US antitrust case under which retail pharmacists alleged that drug manufacturers conspired to avoid granting the retailers discounts that were offered to health maintenance organizations (HMOs). The HMOs are viewed as an innovative means of delivering health care to consumers at lower cost. They elicited discounts by credibly threatening to exclude manufacturers' drugs unless price concessions were offered — a strategy drug retailers were unable or unwilling to pursue. In challenging those discounts, the retail pharmacists pursued their traditional strategy of using governmental power to oppose innovations that squeezed their price/cost margins and reduced drug prices to consumers. The evidence of manufacturer conspiracy appears to have been ephemeral at best, and the litigation appears more likely to have reduced competition and consumer welfare than enhancing it
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.
Volume (Year): 4 (1997)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.tandfonline.com/CIJB20
Find related papers by JEL classification:
- JEL - Labor and Demographic Economics - - - - -
- cla - - - - - -
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- RÃ¼ggeberg, J. & Schinkel, M.P. & Tuinstra, J., 2005.
"Illinois Walls: How barring indirect purchaser suits facilitates collusion,"
CeNDEF Working Papers
05-10, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Maarten Pieter Schinkel & Jan Tuinstra & Jakob Rüggeberg, 2008. "Illinois Walls: how barring indirect purchaser suits facilitates collusion," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 683-698.
- Patricia M. Danzon & Eric L. Keuffel, 2013. "Regulation of the Pharmaceutical-Biotechnology Industry," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 407-484 National Bureau of Economic Research, Inc.
- Ebenezer Tetteh, 2009. "Implementing differential pricing for essential medicines via country-specific bilateral negotiated discounts," Applied Health Economics and Health Policy, Springer, vol. 7(2), pages 71-89, June.
- Joan Ramon Borrell Arque, 2001. "Drug price differentials caused by de-listing and price cap policies," Working Papers in Economics 70, Universitat de Barcelona. Espai de Recerca en Economia.
- Dixit, Ashutosh & Braunsberger, Karin & Zinkhan, George M. & Pan, Yue, 2005. "Information technology-enhanced pricing strategies: managerial and public policy implications," Journal of Business Research, Elsevier, vol. 58(9), pages 1169-1177, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.