Opinion ID: 788070
Heading Depth: 3
Heading Rank: 2

Heading: DuPont Unlikely to Enter Generic Market

Text: 63 Competition from DuPont is not so straightforward. DuPont already sold warfarin sodium, had access to a clathrate supply, and had contacts in the distribution chain. However, DuPont would have had strong incentives not to introduce its own generic, even if it felt that Barr was charging supra-competitive prices. No doubt it observed that within a few years, there would be increased competition among generics, and its own entry would simply accelerate the decline of generic prices and thereby accelerate the segmentation of the market. Since at best it would be substituting sales of a generic at a lower price for sales of Coumadin at a higher price, all with the same cost of production, DuPont's entry into the generic market could only hurt its bottom line. DuPont likely could only have had success selling generic warfarin if it had been able to seize the substantial advantage that a first mover has in the generic market, and even then, it obviously found any advantage would be outweighed by the erosion of sales of Coumadin. DuPont had substantial success maintaining its customer allegiance at the higher price, and we believe it posed no threat of generic entry and therefore no check on generic prices. 64 In sum, the totality of the evidence convinces us that once Barr entered the market, the market became segmented so that Coumadin and Barr each had smaller, distinct customer groups. After the initial segmentation, Barr's price was impacted much more by Geneva's entry than by Coumadin. For example, plaintiffs have pointed to data indicating that Geneva's entry affected Barr's pricing of its dosage strengths also sold by Geneva, but not of its other dosage strengths. This evidence strongly suggests to us that competition among generics is the competitive force that restrains a single generic competitor from raising prices or restricting output. 65 We therefore hold that the relevant market for our purposes is the market for generic warfarin sodium tablets.