This piece discusses pharmaceutical product reformulations and product hopping strategies, along with the impact that antitrust scrutiny may have on innovation incentives. The main thesis presented is that for the sake of preserving innovation incentives, antitrust analysis should not focus on whether the innovation examined is deemed as an “incremental” one according to antitrust enforcers; on the contrary, the overall economic and strategic context of the product reformulation should play the central role in the case-by-case antitrust analysis.
By Amalia Athanasiadou1
Product reformulations are not per se problematic from an antitrust perspective. Introducing a new reformulated version of a pre-existing drug is not in itself anticompetitive. Brand-name manufacturers may legitimately design their product life-cycle management strategies and have serious economic and strategic incentives for focusing on pharmaceutical products which have already been successful in the treatment of patients. Knowing how risky, costly, time-consuming and uncertain an endeavor pharmaceutical R&D is, it is not surprising that brand-name manufacturers invest resources in developing further versions of successful products and in expanding existing technology and know-how.
The main thesis of this piece is that in order to preserve innovation incentives for pharmaceutical companies, such product reformulations should be examined by antitrust enforcers irrespectiv...