Drug Patents

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Recommended: Why do monopolies benefit the pharmaceutical industry

Why do consumers purchase specific drugs for various ailments, sicknesses or diseases they might have? Why do physicians prescribe certain drugs over competitive drugs that may be available to the public? Why is it that most of us can easily name specific drugs that fit the many ailments of today’s society? On the surface the answer might be as simple as good TV advertising or radio commercials or even internet adds. The truth of matter is the major pharmaceutical manufacturers own the patents on these drugs and this gives them all of the marketing budget and muscle they need to promote the drug and control the pricing. The incentives for larger pharmaceutical companies are very enticing and as a result, they don’t mind spending the time in clinical trials and patent courts to get their drugs approved. Some will even get patents on the process by which the drug is manufactured, ensuring that no competitor can steal the drug or the process. This protects their large financial investment and nearly guarantees a large return for their investors. Many consumer rights groups claim this is nothing more than legalizing monopolies for the biggest manufacturers. A monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. A monopoly sells a good for which there is no close substitute. The absence of substitutes makes the demand for the good relatively inelastic thereby enabling monopolies to extract positive profits. It is this monopolizing of drug and process patents that has consumer advocates up in arms. The granting of exclusive rights to pharmacuetical companies over clinical a... ... middle of paper ... ... also in future research. Works Cited Friedman, Milton. 2002. Capitalism and Freedom. Pages 127-128. Lehman, Bruce. 2003. “The Pharmaceutical Industry and the Patent System”. International Intellectual Property Institute. Pages 1-14. Yu, Winnie and Joel Hay. 1999. “Drug Patents and Prices: Can we Achieve Better Outcomes?” Measuring the Prices of Medical Treatments. Pages 27-28. Food and Drug Administration. 2004. “Savings from Generic Drugs Purchased at Retail Pharmacies”, http://web.archive.org/web/20080223131005/http://www.fda.gov/cder/consumerinfo/savingsfromgenericdrugs.htm. Meurer, Michael. “Pharmacogenomics, Genetic Tests, and Patent-Based Incentives”, Boston University School of Law. Pages 1-8. Grabowski, Henry and John Vernon. 1986. “Longer Patents For Lower Imitation Barriers: The 1984 Drug Act”, The American Economic Review. Pages 196-198.

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