| luiscabral.net > IIO Home > 15. Strategy and Entry > | |
FTC investigates deals with generics manufacturers
The Federal Trade Commission (FTC) is currently investigating alleged anticompetitive practices by a number of large pharmaceutical firms, including Aventis and Abbot Laboratories. The alleged anticompetitive practice consists of paying manufacturers of cheap, generic drugs to keep competition out of the market for a period of time.
In the case of Abbot, the pharmaceutical giant offered Geneva Pharmaceuticals $4.5 million a month if the Swiss firm delayed production of the generic version of Hytrin, the popular brand-name blood-pressure drug. (When the generic version was finally introduced, sales of Hytrin fell significantly.) A similar situation applies with respect to Aventis, who was paying Andrx $10 million a quarter to stay out of the market for Cardizem CD, a top-selling heart drug. (This arrangement ended in June 1999.)
Both Abbot and Aventis deny any wrongdoing. The FTC, however, warned that ``pharmaceutical firms should now be on notice'' that these contracts ``can raise serious antitrust issues, with potential for serious consumer harm.'' The FTC also threatened remedies such as ``disgorgement of illegally obtained profits'' if future violations take place.
Source: The Wall Street Journal, March 17, 2000