Mergers with Weak Competition: Reflections on FTC v. Lundbeck
Gregory J. Werden
U.S. Department of Justice - Antitrust Division
February 21, 2012
In FTC v. Lundbeck, courts rejected a challenge to an acquisition placing under common control the only two drugs for treating a heart defect in newborns. Although the court decisions in the case have been severely criticized, they might well have achieved the right result for the right reason. In a simple model reflecting the weak competition between the drugs found by the courts, duopoly nearly always yields monopoly or near monopoly pricing.
Number of Pages in PDF File: 3
Keywords: mergers, antitrust, duopoly, pharmaceutical pricing
JEL Classification: D43, K21, L13, L41
Date posted: February 22, 2012
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