Pay for Delay

1400 Words6 Pages
Pay for Delay Written By: Jed O’Brien Metropolitan State College of Denver at Denver November 24, 2011 For years pharmaceutical companies have been trying to protect their expensive drugs, protected by patents, by paying rivals large sums of money from producing cheaper, alternative drugs. In an article written by Marian Wang, she discusses a particular case in which Pfizer makes “…a deal with certain pharmacy benefit managers … to block generic versions of Lipitor.”(Wang, Pfizer’s Latest Twist on ‘Pay for Delay’) There are a few ethical issues with this: one, the rival companies are infringing on patent laws, two, larger pharmaceutical companies are trying to create as much profit for their company until their patent runs out,…show more content…
“In a federal antitrust complaint, 11 California pharmacies say Pfizer and generic drugmaker Ranbaxy are illegally keeping a generic version of…Lipitor off the U.S. market” (Dinzeo, Pharmacies Accuse Pfizer of Fixing Lipitor Prices). It’s estimated that 16 million American take Lipitor each day which equates to $50 million dollars daily. The people within both Pfizer and Ranbaxy each have a goal to make money for their stakeholders’. Both companies have similar goals and by working together with one another, they can both achieve their main goal to make money. This relationship is described as referent power according to the text Business Ethics: Ethical Decision Making and Cases. Referent power “…exist(s) when one person perceives that his or her own goals or objectives are similar to another’s” (Ferrell, 196). Pfizer persuades Ranbaxy into an agreement in which Ranbaxy will be able to distribute their version of Lipitor in the market earlier than they would have been able to do, and Pfizer gets a temporary, illegal extension on their Lipitor patent. Also, it gives Ranbaxy an incentive to fix the price of their drug just slightly below that of Pfizer’s price because of the early access. Both companies are being accused of coming together and fixing the price of their drugs for financial gain. Not only are companies using “Pay for Delay” to
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