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...
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Auton, Frank. “Opinion: The Case for Advertising Pharmaceuticals Directly to Consumers”. Future Medicinal Chemistry. July 2009. http://www.ncbi.nlm.nih.gov/pubmed?term=Auton%20F%5BAuthor%5D&cauthor=true&cauthor_uid=21426028. Web. 20 April 2014.
There seems to be no law protecting patients from the price increases that these big pharmaceutical companies are making. Marcia Angell, is an American physician, author, and the first woman to serve as editor-in-chief of the New England Journal of Medicine. In chapter 10 of her book, The Truth About the Drug Companies, she talks about stretching out the idea on monopoly. Patents makes it illegal for a specific set amount of time for competitors to sell the same/similar drugs. Once the patent is over, when the company loses its rights to a drug, the Food and Drug Administration (FDA) arranges for the generic version of the drugs made by a different company to go out on the market. When there is only one generic brand on the market, the cost may not be as cheap because the generic brand and the brand name shadow prices. This keeps the generic version just beneath the price of the brand name. Although the generic is not that much cheaper than the brand name, in the course of one year, the brand name company will lose hundred of millions of dollars due to generic drugs. From an economic point of view,
It is said that name-brand prescription drugs in Canada cost approximately 40% less than they do in America. But it is illegal for the transport of drugs from Canada to America. Why? It is because Pharmaceuticals are simply greedy and prey on victims that are in need of their products to survive. It makes it hard for large households on a budget to purchase drugs to keep healthy. The way pharmaceutical companies look at their clients is like this: It is a life or death situation for them so the customers have to buy it in order to survive. According to the annual Fortune 500 survey, the pharmaceutical industry, expectedly, made it at the top of the list of the most profitable. The top seven pharmaceutical companies took in more profit-money than the top seven media companies, the top seven airline companies, the top seven oil companies, and the top seven car manufacture companies. (…cost so much, CNN) The profits of pharmaceutical companies are outrageous and extreme. There are many reasons to why these companies are greedily taking advantage of customers. The number one reason is because people who are need of these prescriptions have no other choice but to purchase them.
Michael Crichton in “Patenting Life”and John E. Calfee in “Decoding The Use Of Gene Patents” discuss Gene Patent. Although the authors agree that the test for cancer is too expensive, the authors have different views about how much each patient should pay for medical expenses and who should get the better treatment by the cancer they have. Gene patents is very dangerous, but also very expensive to care for unfortunately. Test for breast cancer now costs $3,000 “Crichton”(441). Now because of it costing so much, they have had six lawsuits by 2008 “Calfee” (445).
The United States spends more per capita on health care than any other country, with the percentage of gross domestic product dedicated to health care doubling from 9% in 1980 to 18% in 2011(Kesselheim,). One of the contributors to health care inflation is prescription drugs. Pharmaceuticals account for about 10% of total health care costs, spending on pharmaceuticals is poised to swell in upcoming years as a result of the increasing prices of complex specialty medicines (Kesselheim). Name brand drugs are going to have to be set at higher prices, in order for pharmaceutical companies to receive a profit. If the patient has full coverage on a medication, there is a greater chance that medication will be taken, although it may not be
The first social problem surrounding the health care system in the United States is the growing problem with pharmaceutical companies. The industry averages a 17% profit margin and it has been booming for decades, but the industry is being heavily led by a core group of companies (Dr. Pratt). “In 1992 the top 10 companies accounted for roughly one-third of global pharmaceutical revenue, after a period of consolidation, by 2001 the top 10 accounted for nearly half.”( Leon-Guerrero, Zentgraf, 172). These companies hold a large majority of the market share and make most of their money off patented drugs. This growing core of companies that are dominating the market are causing more problems rather than solving them. These companies are all about making as much money as they can and it shows through the salaries of the executives of these companies (Dr. Pratt). The pharmaceutical industry should have their number one priority be to the users of their products rather than profit gains.
Although monopolies appear damaging at times, there are arguments that they are an advantage to society. Monopolies in the pharmaceutical industry drive companies to pursue research and development (R&D) efforts to gain new patents. According to a 1992 study, among the 24 US. Industry groups, pharmaceuticals dedicated 16.6% of their amounts to basic research, while all other industries averaged at 5.3% (Sherer 1307). This fact validates the incentive pharmaceutical companies have to get a patent and acquire more power. Pfizer encourages R&D because of the incentives and a want to obtain patents to receive more profit. Pfizer has to promote itself to be successful, creating a good brand image that consumers will trust. If the company can advertise successfully, more consumers will purc...
Patent rights, usually lasting up to 20 years before expiration, allow the pharmaceutical company which produced the drug, the right and ability to sell it. These patents create a temporary monopoly which allowing firms who paid for production to make a profit for their investment. Generally after the patent has expired, the drug is then mass produced under generic labeling, and is often much cheaper and accessible than was the patented version. But throughout the duration of the patent, availability of the drug has become a large problem. With only one company having exclusive rights in marketing and manufacturing the drug, it becomes unavailable in some countries and its high costs prevent those in need from obtaining it. The Drug Competition and Patent Term Restoration Act allows the FDA to approve the production of generic versions of previously patented drugs by bypassing the redundant health and safety research measures reducing the additional amount of years for public availability of the drug.
Research Question: How does the manipulation of intellectual protection and the consequences of monopolistic companies affect pricing of pharmaceutical drugs in the United States compared to the rest of the world?
For several decades, patents have been issued for the genes of various life forms including plants, animals, and segments of human DNA. Typically, gene patent holders are researchers in federal organizations, colleges, and companies; they often collect patents as a means for protecting their investment in research. The U.S. Patent and Trademark Office allows for genes to be protected as intellectual property with the intention of encouraging research and innovation, just as with any patent. However, gene patents have proliferated while leaving fundamental questions unanswered: do gene patents truly nourish innovation as other patents do, and what are their implications on society and on the lifeforms whose genes are subject to patenting? With further investigation, their negative impact will become apparent.
Pharmaceutical patents are patents for inventions within the pharmaceutical industry. Patents give exclusive rights for an invention for a product or a process of making a product . There are many aspects to patents in the pharmaceutical industry that are both pros and cons; it just depends on what industry you are in. Pharmaceutical companies take out patents so they can regulate the market and restrict competition from other companies. By obtaining patents pharmaceutical companies also attract investment. In addition to this pharmaceutical companies can also regulate the price of the drug as they will be the only company selling that drug. However these aspects of patents can adversely affect the generics industry. The generics industry cannot make or sell drugs that are patented but once a patent licence expires, both the generics industry and the WHO see increased benefits as drugs become more widely available around the world (i.e. developing countries) at a lower price. Here we will discuss the pros and cons of patents from the point of view of the pharmaceutical industry, generics industry and the WHO.
It is a common perception that the threshold for patent grant is lower than those of Australia’s major trading partners. Indeed, according to the legal interpretation of the statues, the body in charge of the Australian patent system, IPAustralia, maintains a lower threshold of novelty and inventiveness compared to the United States Patent and Trademarks Office (USPTO) and the European Patent Office (EPO). However, a study by Jensen et al. comparing grant rates of different patent offices finds the patentability threshold in Australia higher than that of the USPTO.