The scenario case of a big pharmaceutical company compensating the generic competitor company in the aim of market leadership is an ethical debate issue. Legally, once a company is denied the patent rights by the government, the competitors can utilize the processes although the margin excludes the use of another company’s secrets (Peng, Ahlstrom, Carraher & Shi, 2017). On the other hand, it is not an ethical practice between the two pharmaceutical companies because it is a form of manipulation of the market. One aspect of manipulation is the limitation of the consumer’s choice mainly because the competitor is holding off thus prompting the selection of the big pharmaceutical’s products. Another aspect is the conceptual monopoly of the price due to lack of competition. The company is empowered to increase or decrease the cost of the products to the consumers hence the possibility of manipulating the consumer’s purchasing power to profit making. Besides, the lack of competition enhances the opportunity of the monopoly in reducing the production cost through a decrease in the differentiation strategy in the aim of increasing the profit margin.
The agreement that the two pharmaceutical companies establish financially benefits their engagement in the monopoly business although it is a violation of the anti-monopoly industry due to the illegal procedures. The strategy ideally aims at avoiding the legal measures of the emergence of a monopoly in the market hence the freedom of market manipulation through the different approaches (Levy, 2016). The practice violated the ethical baseline of business in the pharmaceutical industries and considered an illegal strategy because of the nature of the plan that is profits oriented. Ethical business is deemed to be operating under the right category of a legal framework without evasion of the conditions that abide the different business categories.
Levy, M. S. (2016). Big Pharma Monopoly: Why Consumers Keep Landing on Park Place and How the Game Is Rigged. Am. UL Rev., 66, 247.
Peng, M. W., Ahlstrom, D., Carraher, S. M., & Shi, W. S. (2017). History and the debate over intellectual property. Management and Organization Review, 13(1), 15-38.