What Makes a Price (un)Fair? Excessive Pharmaceutical Pricing in European Competition Law
(2022)- Abstract (Swedish)
- Prohibition of excessive pricing belongs to one of the oldest legal constructs in human history. The historical roots and the near-universal codification of the concept of excessive pricing has however not mitigated the contentious quarrel alongside seemingly unreconcilable legal-economic positions. Positions ranging from those denying the very existence of excessive pricing, let alone endorsing enforcement, to others advocating energetic enforcement against excessive pricing as the prima facie core function of Competition Law.
This tension reflects the divide between different strands of thought in competition law and economics, and in particular the question whether fairness or efficiency should guide competition law... (More) - Prohibition of excessive pricing belongs to one of the oldest legal constructs in human history. The historical roots and the near-universal codification of the concept of excessive pricing has however not mitigated the contentious quarrel alongside seemingly unreconcilable legal-economic positions. Positions ranging from those denying the very existence of excessive pricing, let alone endorsing enforcement, to others advocating energetic enforcement against excessive pricing as the prima facie core function of Competition Law.
This tension reflects the divide between different strands of thought in competition law and economics, and in particular the question whether fairness or efficiency should guide competition law enforcement and policy.
This thesis critically assesses the arguments for and against the enforcement of the prohibition of unfair pricing in accordance with various normative legal and economic concepts. It also includes a review of the jurisprudence of European Commission, Court of Justice of European Union, some selected Member states as well as the different proposals in the literature. The aim is to arrive at a more coherent interpretation and application of legal and economic discourses on unfair, excessive pricing, with added emphasis on the dynamics of the pharmaceutical sector and what theories of harm are well suited in this context.
Excessive pricing within the pharmaceutical sector entails its own set of unique features, involving intellectual property rights, competition law, regulatory affairs and Right-to-Health as a basic human right. The increased financial burden on strained health budgets paired with ever increasing drug prices intensifies the debate. The matter of fairness versus efficiency is thus a highly timely issue in regard to division of scarce resources, as recently demonstrated by the controversies surrounding COVID-19-vaccines and treatments.
This thesis elevates the importance of a dynamic analysis of competition law in the pharmaceutical sector by treating innovation and collective preferences on Right-to-Health and Fairness in Pricing as endogenous rather than exogenous. The inquiry further questions the monolithic view of Economic Analysis of Law in general, and of competition law objects and goals in particular, contesting the Schumpeterian presupposition of monopolistic profits as the focal driver behind innovation, as well as the Posnerian-Welfarist argument of prioritising “efficiency” and “wealth maximisation” instead of “fairness” regarding normative object of the law.
Moreover, this thesis forwards the Dual Entitlement and Just Price theory as well as ex-ante sector-specific price, or the equivalent price calculated by way of Health Technology Assessment and QALY, as the appropriate competitive benchmark to be used in ex-post excessive pricing assessments.
The suggested screening and assessment test allows for a highly dynamic, structured and holistic approach, as well as providing ex ante legal certainty to market players. The proposed test is in line with settled case law of CJEU as well as Commission guidelines and enforcement practice and combines modern economic research with centuries-old legal rationales. It is further efficient, objective and offers legal certainty and procedural economy to all parties concerned.
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https://lup.lub.lu.se/record/fc9f8f4b-42ed-4b4d-9ff3-2e2f7a52ed58
- author
- Kianzad, Behrang LU
- publishing date
- 2022
- type
- Thesis
- publication status
- published
- subject
- pages
- 500 pages
- publisher
- University of Copenhagen
- language
- English
- LU publication?
- no
- id
- fc9f8f4b-42ed-4b4d-9ff3-2e2f7a52ed58
- date added to LUP
- 2024-09-27 17:55:23
- date last changed
- 2024-10-01 13:36:43
@phdthesis{fc9f8f4b-42ed-4b4d-9ff3-2e2f7a52ed58,
abstract = {{Prohibition of excessive pricing belongs to one of the oldest legal constructs in human history. The historical roots and the near-universal codification of the concept of excessive pricing has however not mitigated the contentious quarrel alongside seemingly unreconcilable legal-economic positions. Positions ranging from those denying the very existence of excessive pricing, let alone endorsing enforcement, to others advocating energetic enforcement against excessive pricing as the prima facie core function of Competition Law. <br/><br/>This tension reflects the divide between different strands of thought in competition law and economics, and in particular the question whether fairness or efficiency should guide competition law enforcement and policy. <br/><br/>This thesis critically assesses the arguments for and against the enforcement of the prohibition of unfair pricing in accordance with various normative legal and economic concepts. It also includes a review of the jurisprudence of European Commission, Court of Justice of European Union, some selected Member states as well as the different proposals in the literature. The aim is to arrive at a more coherent interpretation and application of legal and economic discourses on unfair, excessive pricing, with added emphasis on the dynamics of the pharmaceutical sector and what theories of harm are well suited in this context.<br/><br/>Excessive pricing within the pharmaceutical sector entails its own set of unique features, involving intellectual property rights, competition law, regulatory affairs and Right-to-Health as a basic human right. The increased financial burden on strained health budgets paired with ever increasing drug prices intensifies the debate. The matter of fairness versus efficiency is thus a highly timely issue in regard to division of scarce resources, as recently demonstrated by the controversies surrounding COVID-19-vaccines and treatments. <br/><br/>This thesis elevates the importance of a dynamic analysis of competition law in the pharmaceutical sector by treating innovation and collective preferences on Right-to-Health and Fairness in Pricing as endogenous rather than exogenous. The inquiry further questions the monolithic view of Economic Analysis of Law in general, and of competition law objects and goals in particular, contesting the Schumpeterian presupposition of monopolistic profits as the focal driver behind innovation, as well as the Posnerian-Welfarist argument of prioritising “efficiency” and “wealth maximisation” instead of “fairness” regarding normative object of the law.<br/><br/>Moreover, this thesis forwards the Dual Entitlement and Just Price theory as well as ex-ante sector-specific price, or the equivalent price calculated by way of Health Technology Assessment and QALY, as the appropriate competitive benchmark to be used in ex-post excessive pricing assessments. <br/><br/>The suggested screening and assessment test allows for a highly dynamic, structured and holistic approach, as well as providing ex ante legal certainty to market players. The proposed test is in line with settled case law of CJEU as well as Commission guidelines and enforcement practice and combines modern economic research with centuries-old legal rationales. It is further efficient, objective and offers legal certainty and procedural economy to all parties concerned.<br/>}},
author = {{Kianzad, Behrang}},
language = {{eng}},
publisher = {{University of Copenhagen}},
title = {{What Makes a Price (un)Fair? Excessive Pharmaceutical Pricing in European Competition Law}},
year = {{2022}},
}