Mergers with Weak Competition: Reflections on FTC v. Lundbeck

3 Pages Posted: 22 Feb 2012

See all articles by Gregory J. Werden

Gregory J. Werden

Independent; George Mason University - Mercatus Center

Date Written: February 21, 2012

Abstract

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.

Keywords: mergers, antitrust, duopoly, pharmaceutical pricing

JEL Classification: D43, K21, L13, L41

Suggested Citation

Werden, Gregory J., Mergers with Weak Competition: Reflections on FTC v. Lundbeck (February 21, 2012). Available at SSRN: https://ssrn.com/abstract=2008756 or http://dx.doi.org/10.2139/ssrn.2008756

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
203
Abstract Views
1,561
Rank
271,197
PlumX Metrics