Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

RESALE PRICE MAINTENANCE COULD BE "BENEFICIAL" IN TWO CIRCUMSTANCES -- FTC REPORT

Executive Summary

An FTC policy allowing resale price maintenance could be beneficial in at least two specific circumstances, according to a report released Oct. 11 which evaluates a series of the Commission's vertical price restraint cases. According to the report, prepared by outside consultants working with FTC staff, "The evaluations of the resale price maintenance (RPM) cases would appear to be consistent with the following conclusions: (1) an approach that allows RPM by a new entrant is very likely to be socially beneficial; and (2) a provision in RPM remedial orders that allows dealer selection on the basis of quality is also likely to be beneficial." The report declares that "the evaluation cast doubt on the desirability of retaining the current rule on RPM -- a per se ban with no exception." The evaluation project, begun in 1978, included an examination of RPM cases from five industries; clothing, shoes, audio components, hearing aides and industrial gases, with the intention that the findings could apply outside those industries. RPM is a form of vertical restraint. Noting the review did not reveal an ideal method of handling vertical restraint cases, the report stated: "As a group, these evaluations seem to us to be better at demonstrating the potentially significant shortcomings of the enforcement policies that have been proposed than at providing guidance is deciding which of the various per se or rule of reason options is the optimal policy." In the per se approach, RPM would be considered illegal regardless of potential economic benefits. Under the "rule of reason," an economic analysis would determine whether, on balance, the effects are pro- or anti-competitive.

You may also be interested in...



Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth

UsernamePublicRestriction

Register

PS051363

Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel