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Essay / Research Paper Abstract
This 14 page paper examines the way in which prices of branded drugs, and the related profit they create for the pharmaceutical companies, is impacted when patents expire and the branded drugs have to compete with generic products. The paper considers how the law of supply and demand manifests in this market where an increase in supply does result in a reduction of prices and to what extent this occurs. The paper also looks at the US Hatch-Waxman Act which was introduced to decrease the barriers of entry for the generic drugs whilst the patent periods were extended. The bibliography cites 5 sources.
Page Count:
14 pages (~225 words per page)
File: TS14_TEdrugpr.rtf
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Unformatted sample text from the term paper:
reduce the cost of drugs and increased patient/customer awareness adding to this pressure. IN recent years the cost of many drugs has decreased to the benefit of many patients. This
current situation in the United States can be traced back to the Hatch-Waxman Act, which reduced the barriers of entry for generic drugs at the same time as extending the
period a patent would last. The increased ability of generic drugs to be dispensed was codified in this act and also seen in the legal case of Roche Products v.
Bolar Pharmaceuticals 733 F.2d 858 (Fed. Cir. 1984) (Lexis, 2004). The impact of the changes and the developments since that time has been a large increase in the level of
competition, which has also had a dramatic impact on prices. To understand the impact of competition on prices we need to consider the way process in the drug industry
are set. The pharmaceutical industry is well know for companies where share prices fluctuate. This is due to the volatile nature of the industry and the way that profits fluctuate.
The development of drugs takes a great deal of investment. This investment is often highly speculative, as many of the drugs developed or tested will never make it to market
due to ineffective results, the development of side effects or other influencing criteria. Many of the aspects of the aspects that prevent
a drug entering the market may only be discovered late in the research process. This means the cost of the drugs that do make it to the market need to
cover all the expensive research and development costs of the drug that has made it to the market and allow for the creation of profit to cover for all the
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