An article in the Wall Street Journal on the DOJ’s investigation into possible price fixing by pharmaceutical firms selling generic drugs noted, “Agreements among companies to set prices or to divide up markets have long been illegal under federal antitrust law.”

a. When did price fixing first become illegal under federal law? Why does the federal government care if firms collude to fix the prices of the products they sell?

b. The article also noted that to secure a court conviction in a price-fixing case, “there must be evidence of an agreement among companies to follow each other on prices, such as a written document or telephone conversation or a meeting.” Why do the courts require such a high standard of proof in a price-fixing case? Shouldn’t evidence that all companies are charging the same price for a generic drug be sufficient evidence that collusion has happened? Briefly explain.