Why would the drug maker want to stymie generic competition? Explain your response.
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 antidepressant drug is the company’s best seller, with sales last year of $2.11 billion, representing a 22% increase from the year before.
The Federal Trade Commission (FTC) is conducting an investigation to determine whether the company engaged in activities to prevent generic alternatives to the prescription drug from entering the market. Specifically, the FTC 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.
Answer the following questions:
Why would the drug maker want to stymie generic competition? Explain your response.
What types of legal barriers to market entry exist?
What are the possible ethical dilemmas that are present in this example?
