Monopolies and Mergers

Monopolies and Mergers

Antitrust laws were initially made to stop businesses that got too large from blocking competition and abusing their power. Without these laws smaller corporations would be overran by larger companies. Mergers and monopolies tend to limit the choices offered to consumers due to the fact smaller businesses are usually unable to compete. Monopolies are large businesses that are the only provider of a service or product. On the other hand mergers are the combination of transactions involving two or more businesses.

Federal antitrust law enforcers are looking into a matter concerning a multinational pharmaceutical company. They are trying to determine whether or not the company has attempted to minimize the impact of generic competition to one of its many remunerative prescription drugs. The prescription drug is an anti-depressant drug, which is the company's best seller. It had sales of $2.1.billion, exhibiting a 22% increase from the year before. The Trade Commission is conducting an investigation as well to determine if the company has plighted in exertions to intercept generic alternatives to the anti-depressant from entering the market.

Something like this is taking place in India with Big Pharma. The only thing is that India the third largest in exporting generic drugs, meaning that generic drugs are dominant in the market there. With that being said, Big Pharma is referred to as large pharmaceutical companies whom make more $20 million a year. They expanded their business over into India. The large pharmaceutical company has been trying to gain dominance in India's drug market over the past years. The company in India and Big Pharma had about three cases this year regarding India's pharmaceutical company selling generic forms of drugs such as Gefitinib a lung cancer drug. Despite the battle for dominance between the Indian pharmaceutical company and Big Pharma the India n company is fighting back.

India is currently proposing a multibillion-dollar push to make free medicines available to a large vast of its citizens. Even though India has undergone an economic awakening, the basics of healthcare remain inaccessible to citizens. The multibillion proposal is designated to come in affect by the end of this year. According to Kumar (2012), in such a blow to the West's big pharmaceutical scheme will largely cut out branded drugs, opting instead for cheaper generic alterations. So instead of the larger company trying to prevent the other companies that form generic drugs from entering the market, it's the other way around.

Drug makers have a number of reasons for trying to stall generic drugs from entering the market. According to Healy (2008), in the first year that a competitor goes on the market, a brand name drug loses on average more than half of its market share, and its price drops with each new generic company that produces a