Many of today's miracle drugs required years of research and development at high cost. However, 17 year patent protection has still resulted in incredible profits for companies with the horsepower to develop them, provided the market for them is big enough and their market power is not diluted by "me too" analogues. Sales of Tylenol sti…
Many of today's miracle drugs required years of research and development at high cost. However, 17 year patent protection has still resulted in incredible profits for companies with the horsepower to develop them, provided the market for them is big enough and their market power is not diluted by "me too" analogues. Sales of Tylenol still make it profitable to manufacture and sell at comparatively minimal price per daily maximal recommended dosages. In fact, every miracle drug doesn't have to "pay for itself" when some that are developed become so universally utilized that they create immense profits at relatively low unit dose prices. Orphan drugs that will essentially never become profit centers for the companies that researched, developed and manufactured them need to have different mechanisms to reach the marketplace at affordable cost than the Tylenols of this world. In many cases, the rise of the generics after patent protection has expired has the expected effect; the compound is manufactured by several competitors and the price plummets. When market forces don't work, as in the case of insulin, that's when governments need to step in and regulate the market to the benefit of the public, rather than that of the manufacturers. One knows when one has squeezed the profit margins too much when producers choose to get out of the market rather than stay in it and compete in the presence of constraints on price.
Many of today's miracle drugs required years of research and development at high cost. However, 17 year patent protection has still resulted in incredible profits for companies with the horsepower to develop them, provided the market for them is big enough and their market power is not diluted by "me too" analogues. Sales of Tylenol still make it profitable to manufacture and sell at comparatively minimal price per daily maximal recommended dosages. In fact, every miracle drug doesn't have to "pay for itself" when some that are developed become so universally utilized that they create immense profits at relatively low unit dose prices. Orphan drugs that will essentially never become profit centers for the companies that researched, developed and manufactured them need to have different mechanisms to reach the marketplace at affordable cost than the Tylenols of this world. In many cases, the rise of the generics after patent protection has expired has the expected effect; the compound is manufactured by several competitors and the price plummets. When market forces don't work, as in the case of insulin, that's when governments need to step in and regulate the market to the benefit of the public, rather than that of the manufacturers. One knows when one has squeezed the profit margins too much when producers choose to get out of the market rather than stay in it and compete in the presence of constraints on price.