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The Problem With Relying On Profit-Driven Models To Produce Pandemic Drugs, Ana Santos Rutschman Jan 2020

The Problem With Relying On Profit-Driven Models To Produce Pandemic Drugs, Ana Santos Rutschman

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The longstanding problems of relying on a market response to a pandemic are becoming readily apparent in the United States, which has quickly become the epicenter of the COVID-19 outbreak. The problems are particularly pronounced in pharmaceutical markets, where we are pinning our hopes for both cures and vaccines. In previous work we have shown how characteristics of healthcare markets in the United States create a divergence between the private incentives of for-profit companies and public health needs, leading to sub-optimal health outcomes in what is a uniquely market-driven healthcare system. In this Essay, written as the COVID-19 pandemic unfolds, …


Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro Oct 2014

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

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The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.

As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to …