Patent Games: Plavix Case Study
Columbia Southern University
Abstract
This case study illustrates the conflict between patent protection and preserving a pure competitive market. Pharmaceutical companies are granted patent rights to newly developed drugs for a limited amount of time. Through legal means they are able to form monopolies and maximize their profits. a parent company can move to delay the release of its generic comparison through legal and illegal measures. In the following case Bristol-Myers Squibb fell victim to their own anti-competitive practices.
Why did Bristol-Myers Squibb and Sanofi-Aventis seek a settlement? Apotex had was near the conclusion of the government mandated 30 month stay brought on by
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Sherman’s strategy
Bristol-Myers Squibb’s deceptive practices were likely to catch up to them. This occurred when they crossed paths with Sherman who led Apotex at the time. After everything settled Sherman acknowledged in an interview that he knew the FTC would reject the proposed agreements made by Bristol-Myers Squibb and Sanofi. He also recognized that their spokesman didn’t realize his offer would cause adverse action against Bristol-Myers Squibb (Baron, 2010). He played to their ignorance and entered the agreement. There is no direct answer to the ethics of Sherman’s strategy. He did not actively participate or even condone Brisol-Myers Squibb’s collusion; in fact he knew the agreement would be rejected. There is no way of truly knowing whether Sherman acted with malice when implementing his strategy.
Should the FTC and the state attorneys general have rejected the agreements? The FTC and state attorney was right in rejecting Brisol-Myers Squibb’s proposed agreements on the grounds that it is an anti-competitive practice. The second agreement would have been rejected as well provided Bristol-Myers Squibb was completely honest with the FTC. Upon submission of the second agreement to the department of justice they affirmed under oath that all agreements were as listed on the document with no side arrangements (Chen, 2011). After the initiation of an investigation conducted by the Federal Bureau of Investigations
The “Cold Feet” dilemma had seven people that would be affected by my decision: The shareholders, the Chief Legal Officer, the Marketing Director, the Division Medical Director, the National Institute of Health, the future purchasers of the drug, and the Journal. The reputation lens and the relationship lens were used to help me make a decision. The relationship lens helped me identify that people involved are entitled to a number of limited rights, people without power must be protected, and the right to a fair process. This led me to choose to have a committee with the appropriate authority and representation
Pharmaceutical companies are provided with temporary monopoly rights on the production of new drugs which result in a higher cost on consumers. If competing companies were allowed to produce generic forms of those drugs, consumers will be able to afford those medications even in cases where those consumers have no insurance coverage. The company responsible for developing and inventing the original medication could be offered incentives to invent in the future by either obtaining tax breaks or NIH funding for future research. They could even be offered a percentage of the sales of the generic drugs. Economist Gary S. Becker advocates dropping many FDA requirements that, in his opinion, provide no additional safety measures but rather delay the development of new drugs.[12] Betamethasone, for example, has been part of the standard prenatal care in Europe since the late 1970’s while it got adopted in the U.S. after 1997. On many occasions, the FDA ignores all scientific evidence concerning certain drugs because the manufacturer did not follow their mandated bureaucratic standards.
Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused
They have also attacked patent listings in the Food and Drug Administration “Orange Book” and have alleged monopolization through fraud on the Patent and Trademark Office and sham litigation. Yet other cases have condemned distribution agreements as unlawful exclusive dealing. These government actions have led to substantial private class action litigation against the pharmaceutical industry. The FTC has also challenged numerous mergers and acquisitions in the industry over the last decade. One common feature in all of these cases is the need to define a relevant market. In nonmerger cases, the FTC and private plaintiffsgenerally allege narrow markets, limited to a single drug and its generic equivalent in some cases and to generic drugs excluding the bioequivalent “brand-name” drug in other cases. In its merger challenges, on the other hand, the FTC has alleged markets ranging from those based upon a particular chemical compound, to broader markets based upon various drugs’ manner of interaction or dosage form, to still broader markets of all drugs used to treat a disease or condition. In numerous pharmaceutical merger challenges, the government has included in the market not only currently marketed drugs but also other drugs under development, alleging “innovation markets.”
2. Patent related and Generic Competition: The developed countries like US and Europe have strong patent protection laws which gives a lot of benefits for the pharmaceutical companies. But, the patent
In order to have better understanding, data from the manufacturers is reviewed below which will also show whether the manufacturers of these products behaved ethically as well as what needs to be reconsider with respect to the use of incretin-based therapies because of the growing concern of potential risk of AP. Hence risk management plans will be discussed below. (Butler et al, 2013)
The second rests in Pfizer’s expiring patents on several popular drugs that invite their competitors to enter the market with similarly performing pharmaceuticals. Once these patents expire, Pfizer will either have to extend the patent through reformulating the performance of the drug for another purpose called “ever greening”, or abandon the line in the pursuit of another, more profitable product. Regardless of what they do in terms of their own product offerings, generic imitations of their products will enter the market, diluting the profitability of the drug and forcing reliance on the sales of other existing products to make up the loss.
The Pfizer case provides an introduction to external analysis. The case highlights the pharmaceutical industry, which has enjoyed extraordinary long-run profitability. The case also demonstrates how broad changes in broad environmental factors (i.e. demographics, technology, culture, etc.) have an impact on industry competition. The case is not especially complex, so it is not overwhelming as a first case.
This case study focuses Burroughs Wellcome and their drug Retrovir. Retrovir is a drug that treats AIDS and AID-related complications. In 1987, Burroughs Wellcome obtained approval from the FDA to market azidothymidine (AZT), also known as Retrovir, as a treatment for AIDS. Retrovir was the only kind of drug on the market. Because of this, many critics accused Burroughs Wellcome of price-gouging, as the price of Retrovir was $188 for a hundred 100mg capsules sold to wholesalers. The president of Burroughs Wellcome, T.E Haigler, defended the high price, stating it was due to uncertainty in the market, the possibility of new drug therapies, and profit margins created by new drugs. Even though Retrovir’s price was dropped 20 percent in December 1987, and 20 percent more in September 1989, due to the House of Representatives launching an investigation, there was still pressure to lower the price. The big question faced in this case is what is Burroughs Wellcome’s next move regarding pricing?
While this case is literally full of negative aspects, we will only focus on the main points for both arguments. Pharmaceutical companies want to be sure that the products they spend years and millions of dollars to create are not easily reproduced and sold at discount prices. The profits pharmaceuticals make of their patented products are supposed to refinance new research. So taking away their exclusive distribution rights and allowing other manufacturers to just copy the product and sell it at
There is full concurrence among the four commentators: Gamgort, Nelson, Thompson, and Sheehan that Bryant Pharmaceuticals should not approve Laura's pitch for a product placement of Seflex on the news program The Morning Show. Undoubtedly, Laura and her Bryant colleagues, along with executive management have an unenviable task; conjuring a "dramatic increase in sales" (Peebles, Ellen. October 2003 P. 32) of Seflex prior to its patent expiration in two years. Yet, the purported solution fails to address serious concerns across three critical issues: "legal, business, and ethical" (Peebles, Ellen. October 2003 P. 40).
The pharmaceutical industry confronts several dilemmas every year. Most of these dilemmas revolve around money or whether or not to sacrifice now for a bigger payoff in the end concerning money and/or lives. Pharmaceutical companies tend to use shortcuts that create ethical problems. Drug companies have spent millions/billions of dollars in research, and they obviously want to see
On March 19 of the year 2003, Securities and Exchange Commission brought the trading of HealthSouth to an end on the New York stock exchange, charging the company for inflating its earnings by more than 10 percent and overstated its profits by more than $2.5 billion between 1999 and 2002. HealthSouth’s trading reached to $30.81 in the year 1998, but ever since the trading of the company has been put to an end it reached to $3.91 per share. One week later, Owens pleaded guilty to changing and editing the company’s financial statements.
* Competitive Pricing – Merck is sometimes forced to lower prices of products, either ones that have gone off patent to maintain market share in the product, as well as for products that are still on patent in order to compete with rival products for the same treatment that are marketed by competitors
Residual income is an alternative to ROI. It is the amount of income earned in excess of a predetermined minimum rate of