FTC Anti-Trust Policy: Future of Pharmaceutical Industry

Pharmaceutical drugs are the mainstay of the modern medical industry and this necessitates the continuous development of new treatments by brand-name pharmaceutical companies an essential process for saving many lives². When a generic drug makes its entry into the market, the prices tend to fall drastically, often by as much as 85%. As a result, the brand-name drug companies frequently engage in behaviours to delay the entry of generic drugs to maintain monopolistic profits. These anti-competitive games of the pharmaceutical companies put the burden on the consumers to splitting pills in half or deciding between paying for medications and their rent¹. Consumers have to also deal with the limited availability of essential pharmaceutical products. Another drawback of the industry is that big pharma companies tend to keep adding patents which impose an economic burden on the government¹. This also creates a double burden for the consumers.

This is the stage when anti-trust policies come into the setting. Antitrust laws (also known as Competition Laws) are the policies developed by the US government for the protection of the consumers from unfair business activities and to ensure fair competition¹. These laws aim to provide an equal playing field for the same businesses operating in the pharmaceutical industry while also prohibiting them from gaining an unfair advantage over their competitors. In simple words, these laws prevent businesses from misleading customers in order to make a profit by keeping prices down and quality up.

The Federal Trade Commission (FTC) works for the promotion of competition and for the protection and education of consumers³. A virtual public workshop “The Future of Pharmaceuticals: Examining the Analysis of Pharmaceutical Mergers” was held by the U.S. Department of Justice (DOJ) and the FTC to examine the enforcement of antitrust laws in the pharmaceutical industry on 14^th-15^th June 2022. The workshop was open to the public and was webcasted on FTC’s website, transcribed, and posted online. The link for the same is

https://www.ftc.gov/news-events/events/2022/06/future-pharmaceuticals-examining-analysis-pharmaceutical-mergers.

Some of the major discussion points during the workshop were:

How can FTC improve analysis of Pharmaceutical Mergers?
Factors to be considered while analysing the mergers beyond traditional concerns
How should remedies potential for innovation and prior bad debts being incorporated in merger analysis
How FTC has to think beyond divesture of product/ pipeline as method to curb competition killing
What is the role of the task force in promoting healthy competition which can eventually lead to stopping pricing monopoly?

For detailed analysis of the FTC Workshop feel free to reach us over connect@pharmashots.com with subject line FTC-

Image Source: FTC

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