Mergers with Weak Competition: Reflections on FTC v. Lundbeck
3 Pages Posted: 22 Feb 2012
Date Written: 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.
Keywords: mergers, antitrust, duopoly, pharmaceutical pricing
JEL Classification: D43, K21, L13, L41
Suggested Citation: Suggested Citation