‘The US Supreme Court’s Actavis judgment on reverse payment settlements – should Europe head the same way?’

The CCP’s Autumn seminar series continues this Friday with the inimitable Sven Gallasch (CCP and LAW) presenting his research entitled ‘The US Supreme Court’s Actavis judgment on reverse payment settlements – should Europe head the same way?‘. An abstract for his seminar can be found below.

Abstract

The US Federal Trade Commission has fought against reverse payment settlements in the US pharmaceutical sector for over a decade. On June 17 of this year, the FTC won a probably decisive battle in front of the US Supreme Court. The Court sided with the FTC in finding that reverse payment settlements should be put under antitrust scrutiny and also set out the relevant test to be applied by the lower courts.

Europe however is trailing behind the US authorities and jurisprudence with regards to reverse payment settlements. On the very same day of the Supreme Court’s decision, the European Commission issued its very first decision concerning reverse payment settlements against Lundbeck and a number of generic companies, without having set out its approach to this kind of settlement in public.

I therefore discuss the possibility of applying the US Supreme Court’s Actavis rule, or at least the underlying rationale, in the European context. Informed by this decision, I have developed a legal test that takes the peculiarities of the European pharmaceutical sector into consideration and avoids the most controversial issue – namely the assessment of patent validity by the European Commission.

The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.4.

‘How buybacks eliminate opportunism in vertical contracting’

At this week’s CCP seminar on Friday 22nd November, we are delighted to welcome Joao Montez (London Business School) who will be explaining How buybacks eliminate opportunism in vertical contracting. An abstract for his paper can be found below.

Abstract

A monopolist producer, offering private contracts to competing retailers, may be unable to exercise its monopoly power because of the scope for opportunistic behavior. In this paper we show that the producer eliminates this problem using bilateral contracts with buybacks, together with a price ceiling if needed (buybacks are a price paid by the producer to the retailer for each unit of unsold stock). Contracts with buybacks alone can be sufficient to solve the problem if either the elasticity of demand (at the monopoly price) is not too small or the number of retailers is large.

The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.4.

Responses to consultations from the Competition and Markets Authority

CCP has published two responses to consultations issued by the Competition and Markets Authority:

Andreas Stephan and Catherine Waddams responded to the Competition and Markets Authority, “Competition and Markets Authority guidance: part 2” Download this response pdf 208KB

Morten Hviid, Bruce Lyons and Andreas Stephan responded to the Competition and Markets Authority (CMA) consultation document: “Vision, values and strategy for the CMA” Download this response (pdf 218KB)

All our consultation responses are available on our website. Find them here.

‘A Theory of Public Opinion Management’

The CCP seminar series continues on Friday 15th November with Andrea Patacconi (CCP and NBS), who has recently joined the Centre as a Faculty member and as a Lecturer in Business and Management at the Norwich Business School. He will be presenting his research on A theory of public opinion management‘ which is based on a paper that Andrea has co-authored with Nick Vikander. An abstract for his paper can be found below.

Abstract

Policymakers often motivate their decisions by disclosing information. While this can help hold the government to account, it may also give policymakers an incentive to “fix the evidence” around their preferred policy. This paper considers a model of biased information gathering where the government can influence the workings of an agency in charge of collecting information. We examine how different disclosure rules and the degree of independence of the government agency affect citizen welfare. Our main result is that insulating the agency from political pressure, so that its information is always unbiased, may not be socially optimal. A biased information gathering process can curb the government’s tendency to implement its ex ante favored policy, thus mitigating the agency conflict between policymakers and the public.

As usual, the seminar will take place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.4.