Beginning in the 1990s, with their research pipelines drying up, the major players in the pharmaceutical industry moved to sustain profits by fighting to extend patent periods, by advertising direct-to-consumers, and by raising drug prices. The facts of a case filed recently in California reflect a blend of these strategies: As the patent for AstraZeneca’s blockbuster drug for acid reflux, Prilosec, ran out, the company spent millions to persuade consumers that their new and eight-times-more-expensive product, Nexium, was more effective in treating acid reflux than Prilosec in its generic, over-the-counter form. As of late 2004, Nexium was AstraZenenca’s best selling product, ranked seventh among all prescription drug sales in the United States. With a $257 million blitz to promote Nexium, the

“purple pill,” in 2003, the company outspent all other pharmaceutical drug campaigns that year. AstraZeneca was sued by a coalition including senior citizens groups and the AFL-CIO. (This was the first time the union joined litigation aimed at controlling health care costs.) The plaintiffs argued that the Nexium ads were deceptive.

a. What law would be the basis for their claim? What would they have to prove to win?

b. What actions might the government have taken?

c. Internet Assignment Find out what happened in the actual case.