Pharma, Inc., made Cancera, a prescription drug that helped in the treatment of certain forms of cancer. When Cancera’s patent was about to expire, Synthetic Chemix Corp. developed a generic version of Cancera and prepared to enter the market. Within weeks of this drug’s debut, Pharma offered to pay Synthetic $50 million per year not to market the generic version. Synthetic accepted the offer.

Was the agreement between Pharma and Synthetic a violation of antitrust law? Yes. One per se violation of Section 1 of the Sherman Act is a ______________-______________ agreement—an agreement among competitors to set prices. Although the agreement between Pharma and Synthetic included no specific statement as to price, its purpose was to limit the supply of the generic version of Cancera and thus maintain or increase the price of the brand-name drug.

This ______________-______________ agreement between rival firms also restrained ______________ by delaying the entry of the generic version of Cancera into the market.

Under these circumstances, the agreement was a per se violation of the Sherman Act.