Studies show that branded drugs lose market share rapidly following patent expiration.
For those who can't afford brand name drug it would be unfortunate if there is no substitute. Whether or not the brand name drug is the orginal formula and you will have to pay the higher price if you must have it.
Due to how fast they lose market share though, many major pharmaceutical firms that previously specialized in new drug development and marketing are now establishing divisions or subsidiaries that manufacture and market generic versions of their own branded products—or they are purchasing or affiliating with previously independent generics firms.
The trend toward generics manufacturing by major pharmaceutical firms may threaten the survival of some generics firms, especially the smaller ones, which in turn move them closer to monopoly status. Domination by major pharmaceutical manufacturers could increase their market power, permitting them to set higher prices for their generics. That would again make generics unaffordable, just like their brand name versions.
Thanks to current pricing standards, there is still pressure to keep prices down. Major pharmaceutical firms can't increase the price of their generic products very substantially.
Brand name drugs producers have to charge up due to the high costs to invent a new formula. That's why people have attacked companies for producing like-kind drugs and marketing them as brand names. But that's an argument for another post.
They have to charge the highest price they can because brand-name drug market shares will be slashed by 60 percent within 5 years following patent expiration. Within 6 years of patent expiration, brand-name drugs command only 20 percent of the market. In its study of the industry, OTA made various market analyses running on an assumption that within 10 years brand-name drugs will leave the market altogether. Brand-name drug manufacturers could not compete with the major generic manufacturers.
Due to how fast they lose market share though, many major pharmaceutical firms that previously specialized in new drug development and marketing are now establishing divisions or subsidiaries that manufacture and market generic versions of their own branded products—or they are purchasing or affiliating with previously independent generics firms.
The trend toward generics manufacturing by major pharmaceutical firms may threaten the survival of some generics firms, especially the smaller ones, which in turn move them closer to monopoly status. Domination by major pharmaceutical manufacturers could increase their market power, permitting them to set higher prices for their generics. That would again make generics unaffordable, just like their brand name versions.
Thanks to current pricing standards, there is still pressure to keep prices down. Major pharmaceutical firms can't increase the price of their generic products very substantially.
No comments:
Post a Comment