CRA expert and Northwestern University faculty member Dr. Josh Sherman testified on behalf of CRA’s client, the Israel Competition Authority, at an antitrust trial involving Israel-based parties Teva Pharmaceuticals and Trima Ltd. Judge Tamar Bazak-Rapaport ruled in favor of the position of CRA’s client in a 28-page decision released on April 27, 2026.
Judge Bazak-Rapaport’s decision rejected the parties’ narrow relevant market definition and agreed with and cited Dr. Sherman’s testimony from his cross-examination at trial as support for the ruling. Dr. Sherman was supported by a team including Dr. Eyal Dvir, a principal in CRA’s Antitrust & Competition Practice.
Case background
The parties sought approval for an agreement according to which a new children’s liquid acetaminophen medication manufactured by Trima would be brought to market by Teva. Teva sells an existing children’s liquid acetaminophen medication that is less concentrated than Trima’s new medication.
Economic arguments and Judge Bazak-Rapaport’s findings
Market definition
The parties argued that Trima’s new higher-concentrated acetaminophen medication would not compete in the same antitrust relevant market as Teva’s less concentrated existing acetaminophen medication. In support of their position, the parties’ expert put forth a “natural experiment” purportedly showing that the entry into the market of a larger-sized bottle for an existing highly concentrated acetaminophen medication (by non-party CTS Ltd) did not result in significant diversion of sales from Teva’s existing acetaminophen medication.
In the decision, Judge Bazak-Rapaport critiqued the parties’ expert’s “natural experiment” and associated diversion analysis, stating that the analysis ignored important factors such as temporary supply shortages of Teva’s existing medication prior to the entrance of CTS’s larger bottles, thereby calling into question the validity of the “natural experiment” methodology.
In particular, Judge Bazak-Rapaport’s decision noted that at trial, counsel for CRA’s client presented an alternative calculation based on the code used for the parties’ expert’s calculation, whereby the months during which there was a shortage of Teva’s existing product were neutralized. Judge Bazak-Rapaport stated that this alternative calculation was sufficient to convincingly demonstrate that “…the ‘natural experiment’ argument does not hold” and cannot serve as a basis for the parties’ market definition argument.
Judge Bazak-Rapaport summarized the parties’ claim that the new higher-concentrated medication would not compete in the same antitrust relevant market by stating that “[t]he overall picture that emerges is of products that exert a competitive constraint on one another.”
Competitive effects of the agreement
The parties claimed that the agreement would have no anticompetitive effect on Teva’s existing lower-concentrated acetaminophen medication. However, in the decision, Judge Bazak-Rapaport stated that an agreement would weaken Teva’s incentive to compete aggressively in sales of its existing lower-concentrated medication, also noting that Trima or another third party would have a stronger incentive to charge a lower price for the new higher-concentrated medication relative to the price that Teva would charge for the same medication given an agreement.
Judge Bazak-Rapaport also noted that “…practically speaking, approval of the Arrangement means de facto exclusivity,” adding that if the agreement is approved, Trima’s incentive for independent entry of the product decreases, because, among other reasons, “…such entry affects sales of the product by Teva, in whose success Trima is also a partner.”
CRA Vice President Dr. Josh Sherman is Adjunct Professor of Managerial Economics and Decision Sciences at Northwestern University’s Kellogg School of Management and Adjunct Associate Professor in the Department of Economics at Northwestern University, where he teaches courses in antitrust economics and law and economics.
