"Napsterizing" Pharmaceuticals: Access, Innovation, and Consumer Welfare

We analyze the effects on consumers of an extreme policy experiment -- Napsterizing' pharmaceuticals -- whereby all patent rights on branded prescription drugs are eliminated for both existing and future prescription drugs without compensation to the patent holders. The question of whether this policy maximizes consumer welfare cannot be resolved on an a priori basis due to an obvious tradeoff: While accelerating generic entry will yield substantial gains in consumer surplus associated with greater access to the current stock of pharmaceuticals, future consumers will be harmed by reducing the flow of new pharmaceuticals to the market. Our estimates of the consumer surpluses at stake are based on the stylized facts concerning how generic entry has affected prices, outputs, and market shares. We find that providing greater access to the current stock of prescription drugs yields large benefits to existing consumers. However, realizing those benefits has a substantially greater cost in terms of lost consumer benefits from reductions in the flow of new drugs. Specifically, the model yields the result that for every dollar in consumer benefit realized from providing greater access to the current stock, future consumers would be harmed at a rate of three dollars in present value terms from reduced future innovation. We obtain this result even accounting for the stylized fact that after generic entry branded drugs continue to earn significant price premia over generic products and hence recognizing that Napsterizing does not completely eliminate the incentives to innovate.

Misuse of the Antitrust Laws: The Competitor Plaintiff

In this article we ask (1) under what circumstances are competitor suits meritorious, and (2) do existing rules, such as those requiring proof of market power or other so-called filters and the requirement that plaintiffs suffer antitrust injury, afford a reasonable prospect of eliminating anticompetitive misuses of the remedy by competitor plaintiffs? We evaluate a sample of seventy-four cases in which plaintiffs sued their rivals to learn how competitor plaintiffs use the private antitrust remedy. And because many of these cases allege anticompetitive exclusionary practices, we consider how recent theories of exclusionary practices may be used to support competitor claims. The sample, which was drawn from over 1900 private antitrust cases filed in five federal district courts over an eleven-year period, offers three advantages. First, we can avoid the biases associated with studies that rely exclusively on litigated cases. As is well known, these do not represent the population of claims filed and, as a result, research that relies solely on published opinions cannot offer accurate insights into the overall character of private antitrust enforcement. Second, the time period covered by our sample permits an inquiry into the effectiveness of the Supreme Court\u27s 1977 decision in Brunswick Corp. v. Pueblo Bowl-0-Mat, Inc., which articulated the principle that plaintiffs must allege that they suffered antitrust injury in preventing misuse (at least from the viewpoint of economic efficiency) of the remedy by competitors. Third, a substantial number of the competitor cases in the sample involve claims of anticompetitive exclusion and so allow us to gauge the quality of such claims

A New Template Family For The Detection Of Gravitational Waves From Comparable Mass Black Hole Binaries

In order to improve the phasing of the comparable-mass waveform as we approach the last stable orbit for a system, various re-summation methods have been used to improve the standard post-Newtonian waveforms. In this work we present a new family of templates for the detection of gravitational waves from the inspiral of two comparable-mass black hole binaries. These new adiabatic templates are based on re-expressing the derivative of the binding energy and the gravitational wave flux functions in terms of shifted Chebyshev polynomials. The Chebyshev polynomials are a useful tool in numerical methods as they display the fastest convergence of any of the orthogonal polynomials. In this case they are also particularly useful as they eliminate one of the features that plagues the post-Newtonian expansion. The Chebyshev binding energy now has information at all post-Newtonian orders, compared to the post-Newtonian templates which only have information at full integer orders. In this work, we compare both the post-Newtonian and Chebyshev templates against a fiducially exact waveform. This waveform is constructed from a hybrid method of using the test-mass results combined with the mass dependent parts of the post-Newtonian expansions for the binding energy and flux functions. Our results show that the Chebyshev templates achieve extremely high fitting factors at all PN orders and provide excellent parameter extraction. We also show that this new template family has a faster Cauchy convergence, gives a better prediction of the position of the Last Stable Orbit and in general recovers higher Signal-to-Noise ratios than the post-Newtonian templates.Comment: Final published version. Accepted for publication in Phys. Rev.

The Czech Republic's Commercial Bank: Komercni Banka

Important elements of the transactional structure that created and partially privatized Komercni Banka, the Czech Republic's largest commercial bank, include antecedent actions that determined the bank's management and established its commercial loan portfolio, a decision against splitting the bank's operations into smaller organizational units, the reliance on voucher privatization, and limited post-privatization financial support. The main feature, however, is the government's decision to retain control and majority ownership of Komer6nf. Our analysis of the bank's subsequent credit allocations yields evidence of the government's preference for a deliberate rather than a quick move toward market-driven decision-making. The opportunity to privatize a strong bank and harden enterprise-level budget constraints quickly was foregone, or at least postponed, in favor of creating a protected bank that would deal more leniently with Komercni's politically-vested commercial clients.http://deepblue.lib.umich.edu/bitstream/2027.42/39398/3/wp6.pd

Transactional Structures of Bank Privatization in Central Europe and Russia

In pursuing bank privatization, governments in Central Europe and Russia faced a common set of policy issues including how to break up the monobank system, deal with troubled loans, transfer equity to the private sector, and attract capital to the banks. For each bank undergoing privatization, the government's approach to such issues determines its transactional structure. We develop this conceptual framework and assess the findings from three studies of major commercial banks undergoing privatization. The varied transactional structures used in these privatizations appear to have had significant effects on each bank's microstructure, and to influence bank strategy and post-privatization performance.

The Czech Republic's Commercial Bank: Komercni Banka

Important elements of the transactional structure that created and partially privatized Komercni Banka, the Czech Republic's largest commercial bank, include antecedent actions that determined the bank's management and established its commercial loan portfolio, a decision against splitting the bank's operations into smaller organizational units, the reliance on voucher privatization, and limited post-privatization financial support. The main feature, however, is the government's decision to retain control and majority ownership of Komer6nf. Our analysis of the bank's subsequent credit allocations yields evidence of the government's preference for a deliberate rather than a quick move toward market-driven decision-making. The opportunity to privatize a strong bank and harden enterprise-level budget constraints quickly was foregone, or at least postponed, in favor of creating a protected bank that would deal more leniently with Komercni's politically-vested commercial clients.