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How US Antitrust Can Be On Target: The Brand-Name Prescription Drug Litigation

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  • Roy Weinstein
  • John Culbertson

Abstract

Retail pharmacies have alleged that sellers of brand-name Pharmaceuticals illegally agreed not to sell at discounted prices to retail pharmacies. In this paper, we analyze the theory offered by defendants that their price discrimination can be explained as independent, profit-maximizing conduct, not collusion. The court, in a preliminary decision found evidence of illegal agreements among sellers of brand-name pharmaceuti-cals. We conclude that the theory of independent action ultimately fails as an explanation for this price discrimination

Suggested Citation

  • Roy Weinstein & John Culbertson, 1997. "How US Antitrust Can Be On Target: The Brand-Name Prescription Drug Litigation," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 4(3), pages 257-264.
    • Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:257-264
    DOI: 10.1080/758523206
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    References listed on IDEAS

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    1. Fudenberg, Drew & Tirole, Jean, 1989. "Noncooperative game theory for industrial organization: An introduction and overview," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 5, pages 259-327, Elsevier.
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    Cited by:

    1. Ernst R. Berndt & Joseph P. Newhouse, 2010. "Pricing and Reimbursement in U.S. Pharmaceutical Markets," NBER Working Papers 16297, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Collusion; Price discrimination; Pharmaceuticals; JEL classifications: L41; L65;
    All these keywords.

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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