Infectious Disease Association of America
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How would I make the case that the Infectious Disease Association of America has market power?
This is in regards to an antitrust case by an attorney general against the Infectious Disease Association of America's development process for their Lyme disease treatment guidelines.
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Infectious Disease Association of America is discussed in great detail in this solution.
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Step 1
To establish that the Infectious Diseases Society of America has market power we need to understand what exactly is market power. If the firm has the ability to alter the market price of good or service, it has market power. In this case it is the treatment of Lyme disease. A firm with market power has the ability to affect either the total quantity or the prevailing price in the market. A firm has market power because it controls a large portion of the market. If a firm has the ability to engage in unilateral anti-competitive behavior it has market power.
Step 2
Now let us examine the role of Infectious Diseases Society of America. The body set two sets of guidelines, 2000 and 2006 for the treatment of Lyme disease. The Infectious Diseases Society of America has the ability to alter the price of treatment of Lyme disease. It does this by setting firm guidelines that the treatment for Lyme disease should be provided only for one month when there is ample evidence that a large number of cases of Lyme disease are chronic and require treatment for more than one month and the use of long acting antibiotics. These guidelines significantly affect the price that insurance companies have to pay for the treatment of Lyme disease.
Next a firm with market power has the ability to affect the prices and the ...
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