Pharamaceutical Industry Patent Assessment

There are two main reasons for this phenomenon. First of all the U.S has highly favorable patent laws toward these drug companies, prohibiting normal market competition for long periods of time. These monopolies allow manufacturers to charge several hundred percent above (world) market prices. (Dean Baker and Noriko Chatani) Some pharmaceutical companies have even been accused of delaying generic drug patents through litigation, even bribery in order to keep their drug prices high. It encourages a behavior of rent seekers.

For the now we feel that the pharmaceutical industry is greatly affected by the economic force as people have more spendable income and will be more likely to purchase brand name drugs. As income dwindles, some poor individuals may be unable to purchase even generic drugs. Within the next three to five years since we are coming out of a recession, we will see consumer spending increase and the demand for the highest quality of medicines increase. The economic force will greatly impact the pharmaceutical industry for some time. The next force of the macro environment is the social force.

PROBLEM STATEMENT Teva Pharmaceuticals, the firs multinational pharmaceutical company of Israel had become a successful global giant in the industry of generic drugs. After experiencing a long period of success and growth in the generic drug industry against some big western pharmaceuticals the company had acquired many well known pharmaceutical companies and had achieved its goal of 1 billion dollar theory seemed to be in troubles in building a new strategy and vision to compete with the rapidly growing generic industry. They confronted two big issues as key hurdles in their way.  Many new players entered to the market copying the same techniques for growth like Teva to capture a significant market share by offering low prices due to their low cost strategies. The entry of these players made the industry intense with tough competition, low profit margins and collapsed prices.

This book, Selling Sickness: How the World's Biggest Pharmaceutical Companies Are Turning Us All into Patients, shows how the expanding boundaries of illness and lowering the threshold of treatments is creating millions of new patients. As a direct outcome of this, billions of dollars worth of profits are going to pharmaceutical corporations. This change may revolutionize the health-care systems world wide. As more and more of everyday lives become medical, and people's perspectives are being skewed the drug industry becomes closer to the concept "selling to everyone". Selling Sickness reveals the marketing techniques of the world's biggest and most powerful drug companies.

The Application of iPSCs in the Pharmaceutical Industry The Crisis The pharmaceutical industry has been facing a major crisis over the past few years, predominately due to patent expirations and a decrease in pipeline production. Pharmaceutical companies need to find a way to sustain their profitability as patents on their blockbuster drugs expire. To put this in perspective, products such as Lipitor and Plavix generated $10.8 and $9.7 billion, respectively, in a single year for Pfizer and Bristol-Meyers Squibb (1). Once the patent for these drugs expired, there was a rapid decrease in revenue for these companies due to generic competition. These aren’t the only companies facing this issue, however, the entire industry copes with the loss of exclusivity once the patent for their product expires and generics become available.

One problem that is feeding into our healthcare deficiency is the spending on technology and prescription drugs (Kimbuende, Eric pg.1). For several years, spending on new medical technology and prescription drugs has been cited as a leading contributor to the increase in overall health spending (Kimbuende, Eric pg.1). “New drugs and technology increase healthcare costs because they generate consumer demand for intense costly services.” Even though the cost of healthcare related to technology and drugs have decreased over the pat couple of years, it is still an issue in our society (Kimbuende, Eric pg.1). Another thing that affects our healthcare costs is chronic disease (Kimbuende, Eric pg.1). Seventy-six percent of Medicare spending is on patients with five or more chronic dise... ... middle of paper ... ... pharmaceutical products and medical devices will help improve the nation’s healthcare cost (Hoppe, Hans Hermann pg.1).

The Rise in the Price of Prescription Drugs In the business of drug production over the years, there have been astronomical gains in the technology of pharmaceutical drugs. More and more drugs are being made for diseases and viruses each day, and there are many more drugs still undergoing research and testing. These "miracle" drugs are expensive, however, and many Americans cannot afford these prices. Prescription drug prices rose three times faster than inflation in the decade between 1981 and 1991, making the pharmaceutical industry the nation's most profitable business. Prescription drugs even exceeded the rapidly rising inflation rate for all other medical services.

BACKROUND The pharmaceutical industry's claim that high and increasing drug prices are needed to sustain research and development is a lie to the American public. Drug companies are spending more than twice as much on marketing, advertising, and administration than they do on research and development; that drug company profits, which are higher than all other industries, exceed research and development expenditures; and that drug companies provide lavish compensation packages for their top executives. Recent prices rose more than twice the rate of inflation last year and among the top nine pharmaceutical companies (Merck, Pfizer, Bristol-Myers Squibb, Pharmacia, Abbott Laboratories, American Home Products, Eli Lilly, Schering-Plough, and Allergan), all but one (Eli Lilly) spent more than twice as much on marketing, advertising, and administration than they did on research and development, and Lilly spent more than one and one-half times as much. Six out of the nine companies made more money in net profits than they spent on research and development last year. The executive with the highest compensation package in the year 2004, exclusive of unexercised stock options, was William C. Steere, Jr., Pfizer's Chairman, who made $40.2 million.

There stands a prodigious sum being flung into research and that may perhaps be a cause for the extraordinary drug costs. In the editorial, “The True Cost of Health Care”, “There is an estimated 800 billion put into disease research”. There is a gnawing realization that the medicinal companies pay for the research to discover more drug ingredients and cook up additional cures for these

The bottom line is Americans are paying excessive amounts of money for medical prescriptions. Health-Care spending in the U.S. rose a stunning 9.3% in 2002, which is the greatest increase for the past eleven years. (Steele 46) Many pharmaceutical companies are robbing their clients by charging extreme rates for their products. 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.