Clinton’s proposed ban on pay-for-delay deals would do little to lower drug prices

September 30, 2016

(By Farasat Bokhari)[1]  Banning “pay-for-delay” deals that postpone the production of less-expensive generic drugs is a key action point in Hillary Clinton’s comprehensive plan to lower prescription drug costs. Eliminating these deals could, indeed, save Americans billions of dollars on medications. An even more productive strategy would be to stop drug makers from producing “authorized” generics. Read the rest of this entry »

General Court’s pay for delay judgment in Lundbeck – some guidance, but worries remain

September 14, 2016

(by Sven Gallasch) On 8 September, the General Court handed down its eagerly awaited decision in Lundbeck – the first ever European judgment concerning so-called pay for delay settlements. The Commission’s decision in this case was heavily criticised by practitioners as well as academics like myself for taking the view that agreements in question would constitute a ‘restriction by object’. In a previous blog I argued that the Commission might have pushed it too far by finding this kind of agreement an object restriction, especially in the light of the Court of Justice’s decision in Groupement des Cartes Bancaires, where it was held that such restrictions should be interpreted ‘restrictively’. It is therefore perhaps surprising that the General Court has rejected every one of the 10 arguments (by my count) put forward by Lundbeck, and has upheld the Commission’s decision in its entirety – even the level of the fine. Read the rest of this entry »

Why have Mylan launched a generic EpiPen?

August 30, 2016

(by Farasat Bokhari) In a new development surrounding the controversy of price hikes of Mylan’s lifesaving drug EpiPen, the manufacturer announced that it will introduce a generic version, and sell the new drug at half the price of its branded version. Mylan has increased the price of its EpiPen injections from about $100 in 2009 to over $600 this year and will sell the generic at $300, and has come under scrutiny and strong criticism from public and government officials alike.  Mylan are not alone in increasing drug prices in recent times. For instance, Martin Shkreli increased the price of Daraprim by 5000 percent in 2015. However, that was to do with a hit-and-run opportunity that arose out of its orphan drug status, and the speed with which a rival generic could gain approval to enter the market (see my earlier post, ‘The Economics of a $750 Pill’).

Leaving aside the issue that the generic is still three times more expensive than the original 2009 price, this announcement has left some puzzling over why, or rather how, such a move makes any sense.  To paraphrase the incredulity expressed by Richard Quest of CNN, why would anyone pay $600 for a drug when the exact same product by the same company is also available for $300?  How does Mylan stand to gain anything from this move? Read the rest of this entry »

We need to quantify deterrence when evaluating Competition Authorities: a response to Bruce Lyons’s Blog Post

August 19, 2016

(by Steve Davies) The time has come for us to stop ducking out of the big deterrence issue in competition policy – more precisely, the measurement thereof. This blog has been provoked by Bruce Lyons’s excellent recent blog, in which he argues that the performance target placed on the CMA by government may have serious adverse consequences for the Authority’s incentives to undertake those investigations which generate relatively small measurable direct benefits, but potentially very large, unquantified, deterrent effects. Read the rest of this entry »

The dangerously distorted incentives created by the CMA’s performance target

August 5, 2016

(by Bruce Lyons)[1]  The CMA has recently published its annual report and associated impact assessment.  Its performance management framework commits the CMA “to achieving direct financial benefit to consumers of at least ten times our cost to the taxpayer.” [Annual Report 2015-16, p.66].  Target setting and performance measurement are an important part of performance management.  However, the precise way that the government requires the CMA to justify its funding is dangerously distortionary. Read the rest of this entry »

Will much change in Antitrust post Brexit?

July 8, 2016

(by Andreas Stephan) The UK’s decision to leave the European Union has come as a shock to markets, politicians and indeed to many ‘Brexiteers’. Although protests demanding a reversal of the outcome and legal wrangling over Art 50  (the process for leaving the EU) continue, mainstream politicians have almost universally accepted the result (the obvious exception being in Scotland) and there is little evidence of public perceptions having shifted towards ‘Remain’ since the vote, despite accusations of a dishonest and misleading campaign by the ‘Leave’ camp. It is therefore almost certain that the UK will cease to be a full member of the EU. Bruce Lyons wrote about the (limited) advantages and (greater) disadvantages of Brexit for competition policy in an earlier blog, but here I suggest that much may remain the same regardless of what the UK’s new relationship with the EU ends up being. Read the rest of this entry »

Drug prices post-Brexit – an expensive pill to swallow?

June 15, 2016

(by Farasat Bokhari) Much has already been written about the potential effects of Brexit on both the British economy as well as the rest of the word, vis-à-vis effects on immigration, employment, wages, inflation, investment, growth and so forth, and by now we know that either the sky is going to fall or it will be like manna falling from the sky.  Definitely one of those two.  Reality however is a bit more nuanced, and what follows may be sector specific and depend on the regulations and terms that are negotiated upon exit.  Post exit, will the UK be on its own in terms of trade agreements with the rest of the world, or will it, like Norway, be able to enjoy benefits of a single market by entering into European Economic Area (EEA)? Not to be gauche, how does it affect the price of my medicines here in the UK?   While the Farage v. Cameron debate rages on, in this blog I give example from just one sector – pharmaceuticals – to discuss how prices of branded drugs, which include new and important therapies, may increase due to various trade agreements post Brexit. Read the rest of this entry »