Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260480 
Year of Publication: 
2021
Series/Report no.: 
Queen’s Economics Department Working Paper No. 1474
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
We study cartels that operated in the US generic drug industry, leveraging quarterly Medicaid data from 2011-2018 and a difference-in-differences approach comparing the evolution of prices of allegedly collusive drugs with a group of competitive control drugs. Our analysis highlights (i) the difficulty of establishing a suitable control group when collusion is pervasive, (ii) the importance of accounting for market structure changes when defining the control period, and (ii) the existence of across- and within-drug heterogeneity. We focus on six drug markets that that were part of the expanded initial complaint and where there was no entry in the same class during the collusive period, permitting a clean measure of the causal impact of collusion on prices. Our most conservative estimates suggest that collusion led to price increases of between 0% and 166% for each of the six drugs, and damages of between $0 and $3 million for the Medicaid market.
Subjects: 
antitrust
generic drugs
price fixing
JEL: 
L41
L12
L13
D22
D43
K21
I18
L65
Document Type: 
Working Paper

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