Mergers with Weak Competition: Reflections on FTC v. Lundbeck

3 Pages Posted: 22 Feb 2012  

Gregory J. Werden

U.S. Department of Justice - Antitrust Division

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

Gregory J. Werden (Contact Author)

U.S. Department of Justice - Antitrust Division ( email )

450 Fifth Street, NW
9th Floor
Washington, DC 20530
United States
202-307-6366 (Phone)

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