The Distortionary Effects of Government Procurement: Evidance From Medicaid Prescription Drug Purchasing

In 2003 the federal-state Medicaid program provided prescription drug coverage to more than 50 million people. To determine the price that it will pay for each drug, Medicaid uses the average private sector price. When Medicaid is a large part of the demand for a drug, this creates an incentive for its maker to increase prices for other health care consumers. Using drug utilization and expenditure data for the top 200 drugs in 1997 and in 2002, we investigate the relationship between the Medicaid market share (MMS) and the average price of a prescription. Our estimates imply that a 10-percentage-point increase in the MMS is associated with a 7 to 10 percent increase in the average price of a prescription. In addition, the Medicaid rules increase a firm\u27s incentive to introduce new versions of a drug in order to raise price. We find empirical evidence that firms producing newer drugs with larger sales to Medicaid are more likely to introduce new versions. Taken together, our findings suggest that government procurement rules can alter equilibrium price and product proliferation in the private sector

Entry Decisions in the Generic Pharmaceutical Industry

In this paper I use data on all generic drug approvals granted from 1984- 1994 to examine whether heterogeneity among potential generic entrants can be used to predict which firms will choose to enter a particular market. The findings suggest that a firm's portfolio characteristics, namely, its previous experience with a drug or therapy reduces the cost of preparing an ANDA and increases the probability of entry. A subsidiary's parent's experience is not generally significant in predicting entry of the subsidiary. Firms also prefer entering markets that are similar, in terms of revenue and sales to hospitals, to markets already in their portfolios. On both scientific and marketing dimensions evidence shows that firms are specializing. I explore several different ways of constructing the set of potential entrants and find the results are not affected by methodological variation. Standard IO theory suggests that profits per entrant will decline in the number of entrants. Previous research has found that generic prices depend on the number of generic entrants, and the results presented here show that the total number of entrants increases with the size of the market (revenue). These findings imply that generic firms face a negative competition externality which makes their expectations about who else might be planning to enter any given market important in the entry decision. The limited evidence on entrant beliefs supports this conjecture as do several features of a regulatory upheaval when firms began entering different markets than they had in the past.

Addictive Technology and Its Implications for Antitrust Enforcement

The advent of mobile devices and digital media platforms in the past decade represents the biggest shock to cognition in human history. Robust medical evidence is emerging that digital media platforms are addictive and, when used in excess, harmful to users’ mental health. Other types of addictive products, like tobacco and prescription drugs, are heavily regulated to protect consumers. Currently, there is no regulatory structure protecting digital media users from these harms. Antitrust enforcement and regulation that lowers entry barriers could help consumers of social media by increasing competition. Economic theory tells us that more choice in digital media will increase the likelihood that some firms will vie to offer higher-quality and safer platforms. For this reason, evaluating harm to innovation (especially safety innovation) and product variety may be particularly important in social media merger and conduct cases. Another critical element to antitrust enforcement in this space is a correct accounting of social media’s addictive qualities. Standard antitrust analysis seeks to prohibit conduct that harms consumer welfare. Economists have taught the antitrust bar that the output of a product or service is a reliable proxy for consumer welfare. However, output and welfare do not have this relationship when a product is addictive. Indeed, in social media markets, increased output is often harmful. We argue that antitrust analysis must reject the output proxy and return to a focus on consumer welfare itself in cases involving addictive social media platforms. In particular, courts should reject defenses that rely only on gross output measures without evidence that any alleged increases in output actually benefit consumers

Love or Money? The Effects of Owner Motivation in the California Wine Industry

Many industries are characterized by heterogeneous objectives on the part of firm owners. Owners of private firms, in particular, are likely to maximize utility, rather than profits. In this paper, we model and measure motivations of owners in on particular industry, the California wine industry. In both a formal model and an empirical analysis, we examine the implications of these motivations for market behavior. We find evidence that owners with strong non-financial motivations choose higher prices for their wines, controlling for quality; owners with strong profit-maximizing motives choose lower prices for their wines, controlling for quality. We also find that utility-maximizers are more likely to locate at the higher end of the quality spectrum, whereas profit-maximizers are more likely to locate at the lower end. We explore how the presence of a significant number of utility maximizers within an industry affects the competitive interactions within that industry. We conclude that some winery owners consume' features of their product or business as a substitute for profits and, in the process, provide softer price competition for for-profits. Additionally, in aggregate, their preference for quality can prevent entry into the high-quality segment on the part of profit-maximizing firms.

More Competitive Search Through Regulation

This paper identifies a set of possible regulations that could be used both to make the search market more competitive and simultaneously ameliorate the harms flowing from Google's current monopoly position. The purpose of this paper is to identify conceptual problems and solutions based on sound economic principles and to begin a discussion from which robust and specific policy recommendations can be drafted

Osteoblast-specific deficiency of ectonucleotide pyrophosphatase or phosphodiesterase-1 engenders insulin resistance in high-fat diet fed mice

Supraphysiological levels of the osteoblast‐enriched mineralization regulator ectonucleotide pyrophosphatase or phosphodiesterase‐1 (NPP1) is associated with type 2 diabetes mellitus. We determined the impact of osteoblast‐specific Enpp1 ablation on skeletal structure and metabolic phenotype in mice. Female, but not male, 6‐week‐old mice lacking osteoblast NPP1 expression (osteoblast‐specific knockout [KO]) exhibited increased femoral bone volume or total volume (17.50% vs. 11.67%; p < .01), and reduced trabecular spacing (0.187 vs. 0.157 mm; p < .01) compared with floxed (control) mice. Furthermore, an enhanced ability of isolated osteoblasts from the osteoblast‐specific KO to calcify their matrix in vitro compared to fl/fl osteoblasts was observed (p < .05). Male osteoblast‐specific KO and fl/fl mice showed comparable glucose and insulin tolerance despite increased levels of insulin–sensitizing under‐carboxylated osteocalcin (195% increase; p < .05). However, following high‐fat‐diet challenge, osteoblast‐specific KO mice showed impaired glucose and insulin tolerance compared with fl/fl mice. These data highlight a crucial local role for osteoblast NPP1 in skeletal development and a secondary metabolic impact that predominantly maintains insulin sensitivity

Preserving the Royalty-Free Standards Ecosystem

It has long been recognized in Europe and elsewhere that standards-development organizations (SDOs) may adopt policies that require their participants to license patents essential to the SDO’s standards (standards-essential patents or SEPs) to manufacturers of standardized products (“implementers”) on a royalty-free (RF) basis.1 This requirement contrasts with SDO policies that permit SEP holders to charge implementers monetary patent royalties, sometimes on terms that are specified as “fair, reasonable and nondiscriminatory” (FRAND). As demonstrated by two decades of intensive litigation around the world, FRAND royalties have given rise to intractable disputes regarding the manner in which such royalties should be calculated and adjudicated. In contrast, standards distributed on an RF basis are comparatively free from litigation and the attendant transaction costs.2 Accordingly, numerous SDOs around the world have adopted RF licensing policies and many widely adopted standards, including Bluetooth, USB, IPv6, HTTP, HTML and XML, are distributed on an RF basis. This note briefly discusses the commercial considerations surrounding RF standards, the relationship between RF standards and open source software (OSS) and the SDO policy mechanisms – including “universal reciprocity” -- that enable RF licensing to succeed in the marketplace

The association of functional status with mortality and dialysis modality change : results from the Peritoneal Dialysis Outcomes and Practice Patterns Study (PDOPPS)

BACKGROUND: Little is known about the prevalence of functional impairment in peritoneal dialysis (PD) patients, its variation by country, and its association with mortality or transfer to hemodialysis. METHODS: A prospective cohort study was conducted in PD patients from 7 countries in the Peritoneal Dialysis Outcomes and Practice Patterns Study (PDOPPS) (2014 - 2017). Functional status (FS) was assessed by combining self-reports of 8 instrumental and 5 basic activities of daily living, using the Lawton-Brody and the Katz questionnaires. Summary FS scores, ranging from 1.25 (most dependent) to 13 (independent), were based on the patient's ability to perform each activity with or without assistance. Logistic regression was used to estimate the odds ratio (OR; 95% confidence interval [CI]) of a FS score < 11 comparing each country with the United States (US). Cox regression was used to estimate the hazard ratio (HR; 95% CI) for the effect of a low FS score on mortality and transfer to hemodialysis, adjusting for case mix. RESULTS: Of 2,593 patients with complete data on FS, 48% were fully independent (FS = 13), 32% had a FS score 11 to < 13, 14% had a FS score 8 to < 11, and 6% had a FS score < 8. Relative to the US, low FS scores (< 11; more dependent) were more frequent in Thailand (OR = 10.48, 5.90 - 18.60) and the United Kingdom (UK) (OR = 3.29, 1.77 - 6.08), but similar in other PDOPPS countries. The FS score was inversely and monotonically associated with mortality but not with transfer to hemodialysis; the HR, comparing a FS score < 8 vs 13, was 4.01 (2.44 - 6.61) for mortality and 0.91 (0.58 - 1.43) for transfer to hemodialysis. CONCLUSION: Regional differences in FS scores observed across PDOPPS countries may have been partly due to differences in regional patient selection for PD. Functional impairment was associated with mortality but not with permanent transfer to hemodialysis

John Clare and place

This chapter tackles issues of place in the self-presentation and critical reception of John Clare, and pursues it across a number of axes. The argument centres on the placing of Clare both socio-economically and ‘naturally’, and limitations exerted upon perceptions of his work. Interrogating criticism this chapter finds a pervasive awkwardness especially in relation to issues of class and labour. It assesses the contemporary ‘placing’ of Clare, and seemingly unavoidable insensitivities to labour and poverty in the history industry, place-naming, and polemical ecocriticism. It assesses the ways Clare represents place – in poverty, in buildings, in nature – and, drawing on Michel de Certeau, considers the tactics Clare uses to negotiate his place. It pursues trajectories to ‘un-place’ Clare: the flight of fame in Clare’s response to Byron; and the flight of an early poem in songbooks and beyond, across the nineteenth century