North Carolina Law Review

University of North Carolina School of Law

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Chapel Hill, NC 27514

Pre-Competition

95 N.C. L. Rev. 67 (2016) 

 

As the costs of pharmaceutical research and development rise and concerns grow about the pace of innovation, both federal agencies and industry participants have turned to new forms of collaboration to increase the efficiency and effectiveness of biomedical research. Industry participants, many of them competitors, come together to define joint research and development objectives and to share project results in what are widely known as “pre-competitive” collaborations. There is a prevailing understanding among both industry and governmental actors that these pre-competitive endeavors are not only permissible, but encouraged. 

 

While the term “pre-competitive” is prevalent in the pharmaceutical industry, it is missing from the antitrust lexicon. Neither the courts nor the federal agencies charged with enforcing U.S. antitrust laws have ever recognized pre- competitive activity as immune from antitrust challenge. Rather, antitrust regulators have repeatedly emphasized that when competitors collaborate, anticompetitive behavior may arise regardless of the stage at which collaborating occurs. 

 

This Article critically examines the phenomenon of pre- competitive collaboration through an antitrust lens. It analyzes the apparent disconnect between the industry reliance on pre- competition as a way of demarcating procompetitive arrangements among competitors, on the one hand, and the absence of any such distinction in antitrust law or practice, on the other. It then explores the ways that this disconnect may manifest itself in the choice and structure of collaborative arrangements and suggests a framework for refocusing attention on collaborations that are procompetitive, irrespective of the stage of development.

 

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