Reference no: EM132173247
When evaluating the morality of an action, which of the Please read the short introduction on the pharmaceutical industry of the United States. This short case discusses the regulation factors. If you were the manager of the pharmaceutical company facing the patent expiration, what would you do to protect the profit of the brand name drug?
DISCUSSION TOPIC: Pharmaceutical Industry:
The United States spend $2.2 trillion on health care in 2007, 16.2% of gross domestic product, with about 10% of these expenditures ($227.5 billion) being for prescription drugs. To rein in drug spending, the federal government and third-party payers have encouraged a shift to generic drugs, which are 30 – 80% less costly than brand-name drugs. The 1984 Drug Price Competition and Patent Term Restoration Act (the Hatch-Waxman Act) encouraged competition by lowering entry barriers for generic drugs. Third-party payers use financial incentives to shift their customers to generics.1 There is evidence these efforts have been successful; the dispensing rate for generics has risen from 22% in 1987 to 67% in 2007 (Ganther and Kreling, 2000; Hartman, et al. 2009).
On average, an original pharmaceutical drug entails about $1 billion in costs for research, development, and patent acquisition.2 To recoup these costs, a pharmaceutical drug is given patent protection for 20 years from its patent application; however, a lengthy approval process significantly shortens the relevant patent length. The average, effective patent life was 11.8 years for newly marketed drugs during 1991–1993 (Grabowski and Vernon 1996). Compared to an original drug’s costs for R&D and patent-seeking, generic manufacturers have two inherent advantages. First, they know (or can reverse engineer) the original drug’s chemical composition; this yields lower R&D costs. Second, the Hatch-Waxman Act shortened the U.S. Food and Drug Administration (FDA) approval period, and the cost of obtaining approval, by replacing clinical and human safety and efficacy tests with proof of bio-equivalency (i.e., having the same active ingredients); this has led to an impressive increase in introduction of generics (Cook, et al. 1998).following is true about the utilitarianism framework (mark all that apply)