Columbia Southern University
This case study illustrates the conflict between patent protection and preserving a pure competitive market. Pharmaceutical companies are granted patent rights to newly developed drugs for a limited amount of time. Through legal means they are able to form monopolies and maximize their profits. a parent company can move to delay the release of its generic comparison through legal and illegal measures. In the following case Bristol-Myers Squibb fell victim to their own anti-competitive practices.
Why did Bristol-Myers Squibb and Sanofi-Aventis seek a settlement?
Apotex had was near the conclusion of the government mandated 30 month stay brought on by Bristol-Myers Squibb to delay them from releasing their generic form of Plavix(Chen, 2011). Bristol-Myers Squibb chose to settle rather than litigate for fear of likely losing any patent litigation. Buying out Apotex which was the only other producer of the drug would preserve their monopoly and profit margin. Bristol-Myers Squibb had already had a long history of manipulative practices and had delayed other drugs from entering the market in a similar manner, excessive 30 month stays (FTC, 2003). They had been taking advantage of a loophole in the Therapeutic Equivalence Evaluations system known as the Orange Book (FTC, 2003). Litigation would bring further attention to the practices within the pharmaceutical industry and encourage government intervention. Bristol-Myers Squibb and Sanofi-Aventis prevents Apotex from launching generic drug. Pharmaceutical companies are well within their rights to push for extensions on their patents (Baron, 2010). Bristol-Myers Squibb however did not take a legal approach to this. They should not have attempted to pay Apotex 40-60 million dollars to prevent them from launching their generic drug. The Federal Trade Commission must approve of any such agreement to ensure that it does not violate anti-trust...