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An Analysis of Price Discrimination in Brand Name Drug Wholesaling

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  • Richard Frank
  • Raymond Hartman
  • Benjamin Sommers

Abstract

Accounting measures of profitability are viewed by the academic literature with skepticism, perhaps even disdain. Accounting information and accounting rates of return are, however, relied upon extensively by market participants to compare and contrast the economic performance of alternative investments, alternative companies and alternative industries, at a single point in time and over time. We believe that accounting information and accounting measures of profitability can be useful under specific conditions. We agree that important concerns do arise about the appropriateness of accounting measures for certain analyses. However, one can take these concerns too far. We describe one such situation - one involving an antitrust complaint of price discrimination in a particular network industry - wholesaling in pharmaceutical product markets.

Suggested Citation

  • Richard Frank & Raymond Hartman & Benjamin Sommers, 2007. "An Analysis of Price Discrimination in Brand Name Drug Wholesaling," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 14(3), pages 299-315.
    • Handle: RePEc:taf:ijecbs:v:14:y:2007:i:3:p:299-315
    DOI: 10.1080/13571510701597395
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    References listed on IDEAS

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    1. Franklin M. Fisher, 1987. "On the Misuse of the Profits-Sales Ratio to Infer Monopoly Power," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 384-396, Autumn.
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