Antitrust Laws Essays

1086 Words Mar 5th, 2012 5 Pages

There are instances where major manufacturers are protected by antitrust laws. Even though it may appear they are siding with a monopolistic power in the marketplace. On the other hand federal regulation commissions are hard at work in protecting the consumer from unfair treatment. The judgment under which such decisions are made require careful consideration of the intent of the companies involved and how they affect the consumer.
Why would the drug maker want to stymie generic competition? Explain.
One of the main reasons that a major pharmaceutical company would attempt to stymie generic competition is of course loss of revenues. The
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A major company could also have deals to purchase raw ingredients in producing a product at a lower cost that smaller generic suppliers, this would make their production costs lower. Overall the generic company may be stuck purchasing raw ingredients at a higher cost simply because they do not have enough volume. In this case the Federal Trade Commission has stepped in to protect the smaller pharmaceutical companies insisting this could be a violation of antitrust law (FTC, 2011). Reporting that the large company obtained an exclusive contract or license for a singular ingredient. In the case the FTC argued that this raised the costs of the drug ingredients which of course increased the overall cost to the consumer (, 2011).
•What are the possible ethical dilemmas present in this example?
One ethical issue that could result is that large pharmaceutical companies use their access to larger stores of capital to buy off suppliers of key drug ingredients.
A second ethical issue could be that the major company could use their access advertising and marketing to create distrust or discredit the potency or quality of a generic competitor’s product.
A third ethical issue may be that a larger company could also use capital to buy off major retailers from selling the generic version of their products. Possibly blocking the smaller generic pharmaceutical company from selling at a CVS, Wal-Mart or other major retailer.
•Why do you think

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