Economic Analysis of Patented Drugs vs. Generic Drugs Research Paper

Economic Analysis of Patented Drugs vs. Generic Drugs - Research Paper Example As for example, phenytoin which is the common name and Dilantin is the business name for a single drug. When one drug is in rights security, the company sells it with its business name. When a drug is out of the patent protection (no longer protected by patent), the company may sell the products under whichever name they want common name or business name. Other companies which file for authorization to sell that off-patent drug have to use the similar common name but have the freedom to use their own trade name. This results in drugs to be sold in the same generic name but multiple trade names. (Aronsson et al. 2001) General drugs are remedies that are known by the chemical formulae instead of their brand, or business name. Most of the people, as for example, know the brand title Valium, however the common name of the anxiety defiant drug is diazepam. (Mehta & Mehta, 1997) In the most cases, most drugs are likewise as efficient as brand-name remedies. They too are typically lesser ex pensive than the brand names, frequently as a great deal as 50 % or more. What is the reason behind this? (Mehta & Mehta, 1997; Aronsson et al. Pharmaceutical industries spend a lot of time (usually a decade or more) and cash—generally more money than $300 million—to research, develop, produce, and marketing a brand new drug. Which results in, if the efforts become positive, the brand-name drug which is patented plus sold solely under a particular business name for seventeen years, which permits the industry get back more money than it invested. As a patent runs out, or there is not any patent at all, other industries can produce and market that drug with the drug’s common name or with other brand names. ... As a patent runs out, or there is not any patent at all, other industries can produce and market that drug with the drug’s common name or with other brand names. Other industries don’t need to invest the time and wealth to get the actual drug to the market. Therefore, they can sell the drug at a lower cost. (Mehta & Mehta, 1997; Aronsson et al., 2001) Economic analysis of patent protection versus generic drugs: The limit of the patent security in helping the mechanisms for making novel remedies not supposed to be minimized. To get a fresh prescription remedy in the market, industries of pharmaceutics must beat several obstacles including large investments for researching and development (R&D), authoritarian scrutiny very importantly scientific trustworthiness corresponding the protection and effectiveness of that fresh drug. To attain this, companies continuously search for fresh compounds having medicinal power. When a brand new, hopeful substance is found, the industr y files a request for patent security while it goes through different levels of Research and Development. Current estimations of the expense of developing a fresh drug is ranged between $230 million and $500 million prior to the remedy can be marketed. (Mehta & Mehta, 1997) Getting patent security for a particular remedy, the industry has the power to set the price as per wish; without contest, no descending pressure is there upon the price from different probable drug providers. The monopoly supremacy gained from that patent protection gives inducement for drug industries to put in a big capital needed for Research and Development by permitting them in earning much more than the possible result in more contesting market. With no