August 9, 2010
The purpose of this paper is to analyze federal antitrust enforcers are investigating whether a multinational pharmaceutical company has attempted to minimize the impact of generic competition to one of its most profitable prescription drugs. This anti-depressant drug is the company’s best seller, with sales last year of $2.11 billion, representing a 22% increase from the year before. I will review whether pharmaceutical companies have engaged in activities that will prevent generic brands to the prescription drug from entering the market. Federal Trade commission is challenging a practice among brand-name and generic drug manufacturers to agree to delay the introduction of the lower priced generic drugs to the market. This paper will define antitrust laws and express the purpose to these laws. This paper will review reasons why would drug makers want to stymie generic competition. Next, I will discuss what types of legal barriers to market entry exists. Finally I will express some of the possible ethical dilemmas that can be presented in this example. Let us begin with the hindering of generic competition.
Antitrust laws are considered state and federal laws. This law applies to businesses and individuals. Antitrust laws were created to stop businesses that got too large from blocking competition and abusing their power (Multimedia course material, 2010). The antitrust law seeks to make businesses compete fairly. 1. It is possible that the multinational pharmaceutical company would want to stymie generic competition because of cost. It takes time, research and development to create a new product. Pharmaceutical companies spend an average of $800 million to $1 billion and between eight and sixteen years to research a new drug (nationmultimedia.com). As far as generic brands being a competitor, I can see why pharmaceutical companies would want to hinder generic brands. Once the brand name is no...