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The Anticompetitive Effects of Common Ownership: The Case of Paragraph IV Generic Entry

Author

Listed:
  • Jin Xie
  • Joseph Gerakos

Abstract

Brand-name pharmaceutical companies often file lawsuits against generic drug manufacturers that challenge the monopoly status of patent-protected drugs. Institutional horizontal shareholdings, measured by the generic shareholders' ownership in the brand-name company relative to their ownership in the generic manufacturer, are significantly positively associated with the likelihood that the two parties enter into a settlement agreement in which the brand pays the generic manufacturer to stay out of the market.

Suggested Citation

  • Jin Xie & Joseph Gerakos, 2020. "The Anticompetitive Effects of Common Ownership: The Case of Paragraph IV Generic Entry," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 569-572, May.
    • Handle: RePEc:aea:apandp:v:110:y:2020:p:569-72
    DOI: 10.1257/pandp.20201029
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    File URL: https://doi.org/10.3886/E120742V1
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    Citations

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    Cited by:

    1. Daniel J. Hemel & Lisa Larrimore Ouellette, 2023. "The Generic Drug Trilemma," Entrepreneurship and Innovation Policy and the Economy, University of Chicago Press, vol. 2(1), pages 41-77.
    2. Lewellen, Katharina & Lowry, Michelle, 2021. "Does common ownership really increase firm coordination?," Journal of Financial Economics, Elsevier, vol. 141(1), pages 322-344.
    3. Antonio Estache & Christophe Kieffer, 2021. "Does Common Ownership Influence the Financial Strategy of the French Pharmaceutical Firms?," Working Papers ECARES 2021-09, ULB -- Universite Libre de Bruxelles.
    4. Ahn, Kiefer & Trujillo, Antonio & Gibbons, Jason & Bennett, Charles L. & Anderson, Gerard, 2023. "Settled: Patent characteristics and litigation outcomes in the pharmaceutical industry," International Review of Law and Economics, Elsevier, vol. 76(C).

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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