This paper develops and implements a statistical methodology to account for the equilibrium effects (aka adverse selection) in design of risk adjustment formula in health insurance markets. Our setting is modeled on the situation in Medicare and the new state Exchanges where individuals sort...

Drug patent litigation settlements containing brand-to-generic "reverse payments" are a decades old antitrust concern that has been estimated to cost drug purchasers billions of dollars per year. Most estimates of the harm rely on the Federal Trade Commission's calculation that such payments...

Reinsurance can complement risk adjustment of health plan payments to improve fit of payments to plan spending at the individual and group level. This paper proposes three improvements in health plan payment systems using reinsurance. First, we base reinsurance payments on spending not accounted...

Risk-adjustment systems used to pay health plans in individual health insurance markets have evolved towards better "fit" of payments to plan spending, at the individual and group levels, generally achieved by adding variables used for risk adjustment. Adding variables demands further plan and...

After receiving FDA approval, a generic drug manufacturer can launch "at risk" before conclusion of any patent infringement litigation, but it risks paying damages if it loses. The generic can eliminate the risk by waiting to launch until the appeals process is complete but waiting has downsides...

Settlements of drug patent disputes that involve a potential payment from the brand to the generic signal a possible collusive profit split with a threat to competition, and have undergone intensive scrutiny in the literature on law and economics. A common feature of these brand-generic...

Brand and generic drug manufacturers frequently settle patent litigation on terms that include a payment to the generic manufacturer along with a specified date at which the generic would enter the market. The Federal Trade Commission contends that these agreements extend the brand's market...

In agreements settling patent challenges in the drug industry, the plaintiff brand commonly licenses the defendant generic to sell prior to patent expiry. Some agreements require the generic to pay the brand royalties. Despite the superficial flow of profits, royalty terms may function as part...

Health plan payment systems with community-rated premiums typically include risk adjustment, risk sharing or both to compensate insurers for predictable profits (on young and healthy people) and predictable losses (on the elderly and chronically ill). This paper shows how a payment system based...

We study the question of whether there exist strategies whereby countries are able to sustain a cartel or collusive behavior when bargaining with a bank over the amount of debt to be repaid. We show that despite the existence of economies to scale in bargaining--if commitment were possible the...