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Antitrust Practices and Market Power

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Antitrust Practices and Market Power

Introduction The purpose of this paper is to look into a case of antitrust behavior being investigated involving Johnson and Johnson and Novartis AG, and to analyze and discuss the various antitrust practices that the organizations involved are accused of utilizing. Its purpose is also to discuss how the practices being deployed in this scenario can help any of the organizations to secure market power, which is defined by the ability of a firm to profitably raise the market price of a good or service over marginal cost (Market Power). Finally, it will also discuss the impact that an oligopoly in this case has on society, and will determine whether such scenarios are helpful or harmful to…show more content…
The article also quoted a representative of the European Union (EU) as stating that the competition arm of the EC would investigate whether contractual arrangements between the companies may have had the object or effect of hindering the entry on to the market of generic versions of Fentanyl in the Netherlands (Whalen, 2011).

Effects of Antitrust Behavior by Johnson & Johnson and Novartis AG
Restricting market access to a generic drug provider by way of a contractual agreement or deal results in financial implications for all entities involved in the deal. The oligopoly-holding company would incur large expenses as a result of making a payout to the generic drug maker for delaying release of their product. The generic drug maker would certainly benefit from receiving the payout, however at the expense of losing any market share gained up to that point. From the point of view of the consumer, no longer having access to a specific drug that was effective at treating a particular condition could result in harm or hindered treatment. It is important to note that not all alternatives of the same drug will always have the same effect. If upon completion of investigation both J&J and Novartis are found guilty of antitrust behavior, both entities and perhaps key decision-making figures could be subject to hefty fines and even incarceration, which are typical sentences for
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