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New Manhattan Institute report on drug patents



From MI's Center for Medical Progress, a new report coauthored by Frank Lichtenberg (Columbia Business School) and Gautier Duflos (Paris School of Economics):

...Using data on virtually all prescription drugs sold in the United States during the period 2000-2004, our study examines the effect of patent expiration on prescription drug prices, marketing, and utilization. We examine how prices, marketing, and utilization change over a typical drug's "life-cycle." The year a drug is first sold in the United States is considered year zero. During the first twelve years of a typical drug's life-cycle, it faces very little generic competition. Generic competitors tend to enter the market in years twelve to sixteen. In that period, both the prices of formerly patent-protected drugs and the marketing expenditures on their behalf fall by about sixty percent. However, we also find that the number of drugs dispensed doesn't change. Evidently, the increase in utilization that results from lower prices is offset by the reduction in utilization that results from less marketing....

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.