The Value of Patent Expiration

McKellar Michael R. (), Frank Matthew (), Huskamp Haiden () and Chernew Michael E. ()
Additional contact information
McKellar Michael R.: Harvard Medical School
Frank Matthew: Harvard University
Huskamp Haiden: Harvard Medical School
Chernew Michael E.: Harvard Medical School

Forum for Health Economics & Policy, 2012, vol. 15, issue 1, 13

Abstract: Despite bringing breakthrough medications to market, pharmaceutical companies incurred criticism during the 1990s and early 2000s because of high prices of many drugs. We argue that the benefits of pharmaceuticals should be evaluated in a dynamic context that extends beyond the patent expiration date. Now that numerous patents have expired, generic medications exist in many important drug classes. Thus, consumers reap the benefits of past innovation for years to come. We estimate that across 19 molecules whose patents expired from 2005-2009, $193-436 billion will transfer to consumers over 10 to 20 years due to patent expiration. This suggests that, while prices were high during the patent period, creating an incentive for innovation, the transfers to consumers after patent expiration are significant, which is how the patent system is designed to function.

Keywords: patent expiration; pharmaceuticals (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/1558-9544.1311 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:fhecpo:v:15:y:2012:i:2:p:1-13:n:8

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/fhep/html

DOI: 10.1515/1558-9544.1311

Access Statistics for this article

Forum for Health Economics & Policy is currently edited by Dana Goldman

More articles in Forum for Health Economics & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().