Public Policy: Vitamins for the Drugmakers

Last August the Justice Department’s Antitrust Division brought suit against three major drug makers—American Cyanamid. Bristol-Myers and Chas. Pfizer & Co.—on charges that they had conspired to fix prices of three “broad spectrum” antibiotics. The trustbusters’ charges were similar to those that the Federal Trade Commission had been pressing since 1958 against six drug companies—including the three under fire from Justice. Last week the drug industry got a shot in the arm when FTC Hearing Examiner Robert Piper ordered dismissal of the FTC charges.

After wading through 19,000 pages of testimony and exhibits. Piper found that “there are isolated items of evidence which, standing alone and without explanation, might cause suspicion or speculation of conspiracy. However, suspicion and speculation cannot replace proof.” The prices to retailers of the antibiotics in question, said Piper, tended to become identical because “it was not possible to sell the identical product at a higher price, and it was self-defeating to offer the product at a lower price since this was quickly met by competitors.”

If the FTC’s five commissioners uphold Piper, they will place another U.S. Government agency at odds with Attorney General Bobby Kennedy’s trustbusters—who have already had similar skirmishes with the Treasury Department on the issue of bank mergers (TIME, Sept. 8 et seq.). But if past performance is any guide, the trustbusters will probably press ahead with their case, undeterred by the disagreement of fellow bureaucrats.