‘How should the new economic regulators for healthcare work with the competition authorities?’

With the UK General Election on the horizon, one issue on everyone’s lips is healthcare. It is very fitting, then, that our next CCP seminar sees the always enchanting Mary Guy (CCP & LAW) asking the all-important question: ‘How should the new economic regulators for healthcare work with the competition authorities?‘. Mary is a PhD Researcher and Associate Tutor at the UEA Law School, joining the CCP in 2011. Her research considers numerous competition and regulatory issues in the Dutch and English healthcare sectors. An abstract for her presentation can be found below.

It is well-established that the healthcare sector is subject to myriad forms of regulation, including professional self-regulation and quality regulation, with varying degrees of independence from government. However, recent healthcare reforms in both the Netherlands and England have also established new independent economic regulators for healthcare in the form of the Dutch Healthcare Authority (NZa) and Monitor, respectively.

Both countries have drawn – to a lesser or greater extent – on their experience of establishing economic regulators in other sectors (such as telecommunications) in creating the NZa and Monitor. It might therefore be inferred that there are similarities between the two countries. This extends to the focus of both regulators on patients – via, inter alia, the NZa’s duty to promote the “general consumer interest” under the Dutch Healthcare (Market Regulation) Act 2006 (Wmg) and Monitor’s stated commitment to “making the healthcare system work for patients”.

However, there is also a significant point of divergence: whereas the Authority for Consumers and Markets (ACM) and the NZa have had separate powers in the Netherlands, the Health and Social Care Act 2012 grants Monitor and the Competition and Markets Authority (CMA) concurrent powers (in line with the experience of other sector regulators) to apply provisions regarding competition law and market investigations.

In the Netherlands, the NZa’s ex ante powers can be seen in light of its “market-shaping” role. This has led to concerns that its powers can conflict with the ACM’s ex post interventions, particularly in view of the agencies’ respective significant market power (SMP) and abuse of dominance functions. In consequence calls for the NZa’s competition-related powers to be taken over by the ACM appear to have been heeded in a proposed transfer of SMP powers to the ACM. In England, although Monitor’s role is still in development, there have nevertheless been suggestions that its competition functions should be adopted by the CMA.

In view of these similar criticisms, this paper assesses whether a clear distinction between regulator and competition authority intervention is preferable to the UK practice of concurrent powers, particularly in view of the patient-centric focus of the regulators.

The seminar will take place on Friday 24th April from 13:00-14:00 in the Thomas Paine Study Centre (TPSC), Room 1.03.

Readers may also be interested in an article that Mary co-authored last year: André den Exter and Mary Guy, ‘Market Competition in Health Care Markets in the Netherlands: Some Lessons for England?‘ (2014) 22(2) Medical Law Review 255-273.

‘Entry limiting agreements for pharmaceuticals: pay-to-delay and authorized generic deals’

The CCP seminar series returns from its Easter break on Friday 17th April. And to kick things off, we have with us the masterful Farasat Bokhari (CCP & ECO) presenting his latest paper entitled, ‘Entry limiting agreements for pharmaceuticals: pay-to-delay and authorized generic deals‘. Farasat is an Associate Professor in the School of Economics at the University of East Anglia. His research specialties lie in health economics, as well as a background in applied microeconomics and industrial organisation. An abstract for his paper can be found below.

Launching of authorized generic products and/or paying off a generic challenger, via a pay-to-delay deal, are two of the more contentious moves by R\&D active drug manufacturers to protect their patented drugs against independent generic entry. Pay-to-delay deals involve a payment from a branded drug manufacturer to a generic maker to delay market entry where, in return for withdrawing the challenge, the generic firm receives a payment and/or an authorized licensed entry at a later date but before the expiration of the patent itself.  In this paper we focus on the incentives involved in reaching such deals and why they are stable. We combine the first mover advantage (for the first generic entrant) with the ability of the branded manufacturer to launch an authorized generic, and describe the conditions under which pay-to-delay deals are an equilibrium outcome.  Our model makes explicit the conditions under which authorized generic launch by a branded firm is a credible threat to later potential generic challengers and works as a device that enables the pay-to delay deal with the first challenger.

The seminar will be held from 13:00-14:00 in the Thomas Paine Study Centre (TPSC), Room 1.03.