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The Federal Trade Commission, in a complaint joined by ten States, has charged the pesticide companies Syngenta and Corteva with violating antitrust laws through their arrangements with pesticide distributors. Under the arrangements, the pesticide makers compensate distributors who limit their sales of generic pesticide products that compete with Syngenta and Corteva products.
James MacDonald, a professor of agricultural and resource economics at the University of Maryland, said the companies’ practices make it harder for farmers to buy from generic pesticide makers because it makes it harder for generic manufacturers to access distribution.
“This loyalty program is reminiscent of practices in pharmaceuticals, where the makers of drugs coming off patent would pay generic makers to stay out of the market,” says MacDonald. “The government, via a different regulator, could also tinker with patent policy, shortening patent life, or making it easier to make generics.”
He added that the current policy is that “we like the innovation incentives that a temporary patent monopoly provides to firms, but that the Corteva and Syngenta practices essentially extend that monopoly in ways that patent policy did not intend."