From 2002 to 2017 the Department of Justice investigated and fined the GlaxoSmithKline Company millions of dollars for participating in an Anti-Competitive Behavior and Price Gouging (CPPC, 2019). The Federal Trade Commission (FTC) worked with the Department of Justice (DOJ) in conducting investigations in 2002 that concluded with the GlaxoSmithKline Company violating the Hat-Waxman Act which guides the Food and Drug Administration (FDA) in approving any prescription drugs. The Act was violated when the company falsely filed a patent infringement laws which forced the FDA to tamper with the drug market by banning all the generic versions of Paxil. After further investigations in 2012 and 2017, the GlaxoSmithKline Company was fined for misbranding, selling off-label, and false advertising the efficacy and safety of the drugs (CPPC, 2019). The company was also fined for bribing the Pharmacy Benefits Manager (PBM) to raise Paxil Prices which a direct violation of the Anti-Competitive Behavior.
Considering the findings of the investigations on the Anti-Competitive Behavior and Price Gouging conducted by the DOJ and the FTC, the GlaxoSmithKline Company was conducting a Vertical restrained of trade (Roberts, 2017). The findings of the investigation state that the GlaxoSmithKline Company completely ignored the patient’s safety and started bribing doctors to recommend their drugs to their patients. Additionally, the GlaxoSmithKline Company took the vertical retrained of trade further by bribing the Pharmacy Benefits Manager to raise prices of Paxil at retail to gain more profit from the high demand they induced in the market. Looking at the two situations, GlaxoSmithKline Company first induced drug deficiency in the market by initiating the frivolous infringement laws that forced the FDA to choke generic drugs (Roberts, 2017). Then, conducted the vertical restrained of a trade by involving another participant in the retail market like the PBM and the doctors by bribing all of them.
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References
CPPC (2019). GlaxoSmithKline is the Perfect Example of a Company Engaging in Anti-Competitive Behavior and Price Gouging. Retrieved from https://www.thecppc.com/single-post/2019/05/15/GlaxoSmithKline-is-the-Perfect-Example-of-a-Company-Engaging-in-Anti-Competitive-Behavior-and-Price-Gouging
Roberts, S. (2017). Assessing the record on competition enforcement against anti-competitive practices and implications for inclusive growth. REDI3X3 Working Paper 27.
