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PA 201 > Antitrust Policy, Patents, Pharmaceutical Drugs > Flashcards

Antitrust Policy, Patents, Pharmaceutical Drugs Flashcards

1
Q

What are the antitrust laws in the US?

A

Sherman Act and Clayton Act

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2
Q

What is Sherman Act section 1?

A

covers conspiracies; contracts, combinations that are anticompetitive; agreements among firms to restrict competition; must include 2 firms making decisions together

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3
Q

What is the Sherman Act Section 2?

A

covers monopolization or intent to monopolize; being of a monopoly does not alone offend the antitrust laws; punishes illegally obtained monopolies, not aggressive competition or more efficient competitors

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4
Q

What is the Clayton Act?

A

prohibits certain business practices such as price discrimination, exclusionary practices, and mergers

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5
Q

Who are the enforcers of antitrust laws?

A

Antitrust Division of DOJ and FTC

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6
Q

What are antitrust issues in health care settings?

A

monopolies, monopsonies, collusion, mergers, etc

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7
Q

Patent

A

a patent is a device intended to explicitly give an inventor a property right over its discovery

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8
Q

What are the requirements to qualify for patents

A

patentable subject matter, novelty, utility, non obvious

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9
Q

What is the purpose of a patent?

A

encourage/stimulate research, development, and innovation

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10
Q

What are the benefits of being a patent holder?

A

the right to exclude all others from making, using, or selling for 20 years from the date their application was filed

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11
Q

What is the FDA approval process?

A

Phase I, Phase II, Phase III, FDA reviews application and grants approval if warranted

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12
Q

Phase I of patent approval

A

small human trial to establish drug safety

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13
Q

Phase II of patent approval

A

larger human trial; evaluate safety and effectiveness over longer time period

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14
Q

Phase III of patent approval

A

even larger human trial

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15
Q

Are prescription drugs the highest expenditure in US healthcare?

A

No, they just receive much of the media attention

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16
Q

What is the spending on prescription drugs?

A

~$370B

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17
Q

Why does the US spend more on prescription drugs than other OECD countries?

A

lack of health systems/regulatory systems, patent policy, inelastic demand, availability of substitutes, role of insurance (asymmetric info), new developments

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18
Q

What is the Executive Order (prescription drugs)?

A

imports drugs from other countries; limits on insulin costs; Medicare pays no more than Most Favored Nations pricing

19
Q

Is the Executive Order still in place?

A

most of it is not because they were either blocked by courts or struck down

20
Q

What is Direct Price Regulation (prescription drugs)?

A

creates an independent federal agency (bureau of prescription drug affordability and access) to enforce drug pricing

21
Q

How would the Direct Price Regulation limit drug costs?

A

the agency determines appropriate drug price and enforced those prices (weighs costs of R&D and costs of comparable therapies and consider federal money that contributed); allows govt to negotiate for better drug prices

22
Q

What is the noninterference clause?

A

Prohibits Medicare from negotiating on behalf of its beneficiaries for things like prescription drug pricing

23
Q

What is the Inflation Reduction Act?

A

Medicare negotiating directly with the pharmaceutical drug manufacturers for the price of certain high spending brand name drugs that do not have good alternatives

24
Q

What is the punishment for pharmaceutical companies who do not comply with the Inflation Reduction Act?

A

they must pay a tax/fine of some amount (or could theoretically pull drug from Medicare market but would lose a large market)

25
Q

How have pharmaceutical companies reacted to the Inflation Reduction Act?

A

they have filed suit and do not want to participate, however courts have been siding with Medicare

26
Q

What is product hopping?

A

a firm that has a patent on an existing drug can innovate further into a new idea that related to the original idea in order to receive a new patent and therefore more time with exclusivity

27
Q

How do pharmaceutical companies revise their drugs in order to receive new patents?

A

changing dosage, way to take the drug, how frequently it is taken, etc

28
Q

Why are companies able to product hop?

A

an initial patent covers an active ingredient that is delivered in a specific form and dose with a specific absorption rate

29
Q

When is product hopping procompetitive?

A

if the new product improves health rather than being developed for the sole purpose of maintaining exclusivity

30
Q

When is product hopping procompetitive?

A

if it does benefit health of the consumer

31
Q

What is an example of product hopping?

A

Namenda changed the formula enough to obtain a new patent and discontinued the original drug before its patent expired

32
Q

Why did Oxycontin reformulate?

A

People were misusing the drug by crushing it, so they reformulated to an anti abuse drug

33
Q

What is a no poaching agreement?

A

some agreement not to actively recruit/higher/incentivize someone else’s employee to leave that company and join yours

34
Q

Which antitrust policy covers no poaching agreements?

A

Sherman Act Section 1

35
Q

Who benefits and who is hurt from no poaching agreements?

A

employers benefit since they do not have to offer higher salaries/benefits; employees and hurt because they are trapped in their current job and cannot negotiate salary increases

36
Q

What is Seamen v. Duke?

A

Danielle Seaman was employed by Duke and applied for a lateral position at UNC, did not hire her because of no poaching agreement, there was proven collusion

37
Q

Per se violation

A

all a plaintiff has to prove is that there was an agreement, not that there was an anticompetitive impact

38
Q

Market division/allocation

A

when firms stay in their geographic area and do not serve people who are in other areas due to an agreement between firms

39
Q

What are antitrust damages and how are they determined?

A

Difference between how much you paid and how much the price would have been if there was no price fixing

40
Q

Did people who were affected from no poaching suffer an overcharge or an undercharge?

A

An undercharge (their wages were too low)

41
Q

Horizontal mergers

A

consolidation between providers that offer the same or similar services

42
Q

Vertical mergers

A

consolidation between providers that offer different services along the supply chain

43
Q

What is concentration?

A

takes into account the relative size and the number of firms in the marker; 0 HHI is perfectly competitive market and 10,000 HHI is one firm in the market

PA 201 (14 decks)

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