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Higher Drug Prices from Anticompetitive Conduct: Three Case Studies.

Michael A Carrier

    The Journal of Legal Medicine
    |September 11, 2019
    PubMed
    Summary

    High U.S. drug prices may stem from anticompetitive practices, not just research. Examining Provigil, EpiPen, and Daraprim shows how harmful conduct inflates costs. Antitrust action could lower pharmaceutical prices.

    Area of Science:

    • Pharmaceutical Economics
    • Antitrust Law
    • Health Policy

    Background:

    • U.S. consumers face significantly high prescription drug costs.
    • Brand-name drug manufacturers often attribute high prices to research and development (R&D) expenses.
    • Anticompetitive conduct can also be a significant driver of elevated drug prices.

    Purpose of the Study:

    • To investigate how anticompetitive behaviors by pharmaceutical companies can lead to increased drug prices.
    • To analyze specific case studies illustrating these anticompetitive practices.
    • To advocate for antitrust scrutiny as a means to reduce drug costs.

    Main Methods:

    • Case study analysis of three drugs: Provigil (wakefulness disorder), EpiPen (allergic reactions), and Daraprim (infection treatment).

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  • Examination of business practices that appear solely intended to harm competitors or undermine regulatory frameworks.
  • Review of conduct involving collusive behavior within the pharmaceutical market.

    • Main Results:

    • The case studies demonstrate how specific anticompetitive actions have demonstrably increased the prices of Provigil, EpiPen, and Daraprim.
    • Identified behaviors include those with no apparent purpose other than to stifle competition or circumvent regulations.
    • Collusion among drug companies was also identified as a contributing factor to price inflation.

    Conclusions:

    • Anticompetitive conduct, rather than solely R&D, is a key factor in high U.S. drug prices.
    • Practices that harm competitors, undermine regulations, or involve collusion should face antitrust challenges.
    • Targeting these anticompetitive behaviors through antitrust scrutiny holds the potential to significantly lower pharmaceutical prices for consumers.