Excessive Drug Pricing As An Antitrust Violation

Harry First’s “Excessive Drug Pricing As An Antitrust Violation” was published in 82 Antitrust Law Journal No. 2.

Although high pharmaceutical drug prices in the United States have been roundly condemned, they have not been seen as a target of antitrust enforcement unless they are the result of collusion. This is because of the conventional wisdom that Section 2 of the Sherman Act does not forbid a monopolist from charging excessive prices. This Article takes issue with that conventional wisdom. After exploring the general problem of high prices, and two examples of a non-antitrust approach to this problem, the Article critiques the legal and policy arguments that have been made for why Section 2 does not apply to excessive pricing. The Article then examines how U.S. courts and enforcers have handled excessive pricing by holders of standard essential patents and how competition authorities outside the United States are now tackling the issue of excessive pharmaceutical drug pricing as an abuse of dominance. The Article also looks at three examples of excessive drug pricing, arguing that the excessive pricing in each case could be the basis of antitrust liability under Section 2. The Article concludes with some suggestions for how an antitrust enforcement program in this area might proceed.

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