​First AdC Competition Policy Award attributed to academic work on the pharmaceutical industry

 

The first edition of the AdC Competition Policy Award was given to an academic work on the pharmaceutical industry, which proposes a new research model for the payment agreements that incumbents establish with generic manufacturers to delay market entry, the so-called Pay-For-Delay.
 

Entitled "Pay-for-Delay with Settlement Externalities", the work is authored by Emil Palikot and Matias Pietola, of the Toulouse School of Economics.

The AdC Award Selection Committee, headed by Margarida Matos Rosa, President of the AdC, chose to distinguish this high quality research paper, that addresses a topical and very relevant issue for competition policy, among 25 candidates.

The paper puts forward a theoretical model to investigate pay-for-delay agreements between originators (i.e. incumbents) and generic companies (potential entrants) in the pharmaceutical sector.

Pay-for-Delay agreements have been investigated by antitrust authorities in several jurisdictions, and they have been one of the most debated competition topics of the last few years.

The paper is also related with the priorities of the AdC. Just last month, the AdC have signed a Memorandum of Understanding with Infarmed, the Portuguese medicines regulator, which grants access to data from the pharmaceutical sector to the AdC.

In addition to Margarida Matos Rosa, President of the Competition Authority, the Selection Committee was composed of specialists with a high international scientific reputation in the field of competition policy: Luis Cabral, Professor of the NYU Stern School of Business, Massimo Motta, Professor of the Barcelona Graduate School of Economics, Pedro Pitta Barros, Professor of the Nova School of Business & Economics and Fiona Scott Morton, Professor at the Yale School of Management.

The AdC instituted the AdC Competition Policy Award to mark the 15th anniversary of the institution, which is celebrated in 2018. The award aims to distinguish academic works with relevance to the application of law and competition economics in Portugal. The prize will be alternately awarded to academic works in the area of Economics and Law.

Margarida Matos Rosa believes that "the contribution of academia enriches the mission of the AdC by providing innovative and scientifically robust approaches to developing a more competitive economy to the benefit of consumers."

The work was awarded with 5,000 euros. In addition to the award winner, the Selection Committee has also attributed an Honourable Mention to the paper “Drip Pricing When Consumers Have Limited Foresight: Evidence from Driving School Fees”, authored by Katja Seim, Maria Ana Vitorino and David M. Muir.

Although the paper is not devoted to core matters of competition policy enforcement, the Selection Committee has chosen to recognise the paper’s scientific quality and its contribution to shed further light on a relevant empirical question regarding price discrimination and market power, and is very relevant for the advocacy work of competition authorities.