Analysis Group Experts Publish Law360 Article on “Product Hopping” and the Myth of “Price Disconnects” in US Pharmaceutical Markets
May 25, 2016
Analysis Group Vice Presidents Stephen Fink and Mark J. Lewis recently published an article in Law360 concerning so-called “product hopping” – an alleged scheme by branded pharmaceutical manufacturers to stave off competition from generic manufacturers by converting prescriptions from an older branded product to a newer version of the same product.
Recently, some antitrust analysts have weighed in against pharmaceutical manufacturers in these scenarios, arguing that such allegedly anticompetitive actions are enabled by a “price disconnect” that exists in the US marketplace between prescribers, patients, and insurers.
In their article, Mr. Fink and Dr. Lewis argue that an assessment of the extent of such a price disconnect is often an important, albeit not always dispositive, part of the economic analysis of competitive effects of new product introductions. The authors examine and analyze the evidence concerning “price disconnects” and conclude that, while the connection between prices and quality may be imperfect and adjustments to new pharmaceutical developments may take time, these imperfections are not unique to the market for pharmaceuticals. At a minimum, they argue, the demonstrated ability of insurers to make tangible connections between prices and quality in prescription drug markets should be taken into account when assessing the competitive effects of new product introductions.