Swiss antitrust officials have charged the three leading makers of erectile dysfunctional drugs of a price-fixing cartel. The three are Bayer (Levitra), Pfizer (Viagra), and Eli Lilly (Cialis). According to the Swiss officials, the three companies set and enforced similar "recommended prices" for their drug that resulted in no price competition, higher prices, and higher profits.
The companies are denying it, and they have less than a month to answer the charges. Such subtle price-fixing is hard to pursue, because setting parallel prices is a relatively subtle act that is hard to detect and harder to prosecute.
On the other hand, if it turns out to be true, in Switzerland, it will likely be pursue by the EU and the US. Erectile function drugs form a very hot growth area, Eli Lilly and Pfizer sales have been rising steadily with each having well over a billion dollars in sales annually, while Bayer's Levitra has been losing ground, with annual sales around the $300 billion mark.
The three form a very tight oligopoly, with few alternatives that match the efficacy and ease-of-use of these pills.
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