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What happens in the market for a drug once the patent expire

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Reference no: EM13671047

Patents, trademarks, and copyrights are legal protections that grant monopoly ownership for a given period of time. Drug manufacturers receive patent protection for the drugs they develop. These patents act as a barrier to entry to other firms who could copy the product and sell the drug at a lower price. The twenty year patent allows the producer time to be the exclusive seller in order to recoup the high research and development costs associated with bringing a new drug to market.

Please respond to all of the following prompts:

  • What happens in the market for a drug once the patent expires? Why?

•Given the high research and development costs associated with discovering an effective drug, should drugs be granted patent protection? Why or why not?

  • How would this industry be different if patents did not exist? Do you think it would be better, worse or about the same? Why?

•What actions, if any, could the government take to increase competition in the pharmaceutical industry? Would government intervention improve market outcomes?

 

Reference no: EM13671047

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