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  4. May 2020
  5. The Anticompetitive Effects of Common Ownership: The Case of Paragraph IV Generic Entry

The Anticompetitive Effects of Common Ownership: The Case of Paragraph IV Generic Entry

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Abstract

Brand-name pharmaceutical companies often file lawsuits against generic drug manufacturers that challenge the monopoly status of patent-protected drugs. Institutional horizontal shareholdings, measured by the generic shareholders' ownership in the brand-name company relative to their ownership in the generic manufacturer, are significantly positively associated with the likelihood that the two parties enter into a settlement agreement in which the brand pays the generic manufacturer to stay out of the market.

Citation

Xie, Jin, and Joseph Gerakos. 2020. "The Anticompetitive Effects of Common Ownership: The Case of Paragraph IV Generic Entry." AEA Papers and Proceedings, 110: 569-72. DOI: 10.1257/pandp.20201029

Additional Materials

JEL Classification

  • D22 Firm Behavior: Empirical Analysis
  • G24 Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
  • G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
  • L12 Monopoly; Monopolization Strategies
  • L13 Oligopoly and Other Imperfect Markets
  • L65 Chemicals; Rubber; Drugs; Biotechnology; Plastics
  • O34 Intellectual Property and Intellectual Capital