Over the past decade, “incremental innovation” (pharmaceutical innovations that improve on existing drug therapies) has accounted for 70% of the new drugs approved in the US and a substantial portion of the industry’s revenues. However, concerns that reformulated drugs are being used to delay or preclude generic competition have given rise to a number of high-profile antitrust suits, including cases concerning the drugs BuSpar, Nexium/Prilosec, and DDAVP, among others. Click here to download a PDF of this article:
Assessing umbrella pricing incentives
When collusive agreements involve a subset of firms in an industry, they may create the incentive and ability for firms that are not participants in the cartel...