Strategic Under-utilization of Patents and Entry Deterrence: The Case of Pharmaceutical Industry

Sugata Marjit, Tarun Kabiraj and Arijita Dutta

MPRA Paper from University Library of Munich, Germany

Abstract: This paper seeks to explain why some pharmaceutical companies are observed to withdraw their products before patents are expired and simultaneously introduce new patented (competing) products. Given the specific nature of drug markets, the companies in fact increase the entry cost of the potential generic drug manufacturers and thereby lessen competition for new drugs. The paper determines the optimal date of withdrawing the product and studies comparative static effects of the change of parameters underlying the model.

Keywords: Patent protection; patent expiry; pharmaceutical industries; generic drugs; entry cost. (search for similar items in EconPapers)
JEL-codes: L1 O3 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-com, nep-cse, nep-ino, nep-ipr, nep-pr~, nep-mic and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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