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

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.

Jin Xie and Joseph Gerakos

PAEA Papers and Proceedings

May 2020

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