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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.

Suggested Citation

  • Filson, Darren & Oweis, Ahmed, 2010. "The impacts of the rise of Paragraph IV challenges on startup alliance formation and firm value in the pharmaceutical industry," Journal of Health Economics, Elsevier, vol. 29(4), pages 575-584, July.
  • Handle: RePEc:eee:jhecon:v:29:y:2010:i:4:p:575-584
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    References listed on IDEAS

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    Cited by:

    1. Eric Helland & Seth A. Seabury, 2016. "Are Settlements in Patent Litigation Collusive? Evidence from Paragraph IV Challenges," NBER Working Papers 22194, National Bureau of Economic Research, Inc.
    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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