66 Pages Posted: 19 Apr 2016 Last revised: 23 Dec 2016
Date Written: April 9, 2016
As costs rise and concerns grow about the pace of pharmaceutical innovation, both federal agencies and industry participants have turned to new forms of collaboration to increase the efficiency and effectiveness of biomedical research. Industry participants, many of them competitors, come together to define joint research and development objectives and share project results in what are widely known as “pre-competitive” collaborations. There is a prevailing understanding among both industry and governmental actors that these “pre-competitive” endeavors are not only permissible but encouraged.
While the term “pre-competitive” is prevalent in the pharmaceutical industry, it is missing from the antitrust lexicon. Neither the courts nor the federal agencies charged with enforcing U.S. antitrust laws have ever recognized “pre-competitive” activity as immune from antitrust challenge. Rather, antitrust regulators have repeatedly emphasized that when competitors collaborate, anti-competitive behavior may arise regardless of the stage at which they are collaborating.
This article, for the first time, critically examines the phenomenon of pre-competitive collaboration through an antitrust lens. It analyzes the apparent disconnect between the industry reliance on “pre-competition” as a way of demarcating pro-competitive arrangements among competitors, on the one hand, and the absence of any such distinction in antitrust law or practice, on the other. It then explores the ways that this disconnect may manifest itself in the choice and structure of collaborative arrangements and suggests a framework for refocusing attention on pro-competitive collaborations.
Keywords: precompetitive, procompetitive, pharmaceutical, biomedical, horizontal, collaboration
JEL Classification: K21, O31, O34
Suggested Citation: Suggested Citation