Arbeitspapier

Patent settlements in the pharmaceutical industry: What can we learn from economic analysis?

Patent settlements between originator and generic firms in the pharmaceutical industry have been challenged by antitrust and competition authorities in the U.S. and the EU. Particularly settlements with large "reverse payments" to generic firms raise the concern of collusive behaviour for protecting weak patents and delaying price competition through generic entry and therefore harming consumers. However, it is still heavily disputed under what conditions such patent settlements are anticompetitive and violate antitrust rules. This article scrutinizes critically what economic analysis has so far contributed to our knowledge about the effects of these patent settlements and the possible rules for their antitrust treatment. An important claim of this paper is that the problem of patent settlements can only be understood, if we analyze it not only from a narrow antitrust perspective but also take into account its deep interrelationship with the problems (and the economics) of the patent system. Therefore we identify three different channels of effects, how patent settlements can influence consumer welfare: (1) price effects, (2) innovation incentive effects, and (3) effects via the incentives to challenge weak patents. The paper critically analyzes the existing economic studies and identifies a number of research gaps, especially also in regard to trade offs between different effects. It also suggests that policy solutions for these patent settlements should also be sought in combination with patent law solutions.

Sprache
Englisch

Erschienen in
Series: MAGKS Joint Discussion Paper Series in Economics ; No. 01-2016

Klassifikation
Wirtschaft
Legal Procedure, the Legal System, and Illegal Behavior: General
Antitrust Issues and Policies: General
Intellectual Property and Intellectual Capital
Thema
patent settlements
probabilistic patents
weak patents
pharmaceutical industry
generic competition

Ereignis
Geistige Schöpfung
(wer)
Frank, Severin
Kerber, Wolfgang
Ereignis
Veröffentlichung
(wer)
Philipps-University Marburg, School of Business and Economics
(wo)
Marburg
(wann)
2016

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Frank, Severin
  • Kerber, Wolfgang
  • Philipps-University Marburg, School of Business and Economics

Entstanden

  • 2016

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