Strategic Under-utilization of Patents and Entry Deterrence: The Case of Pharmaceutical Industry
AbstractThis 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 19157.
Date of creation: Nov 2009
Date of revision:
Patent protection; patent expiry; pharmaceutical industries; generic drugs; entry cost.;
Find related papers by JEL classification:
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-19 (All new papers)
- NEP-COM-2009-12-19 (Industrial Competition)
- NEP-CSE-2009-12-19 (Economics of Strategic Management)
- NEP-INO-2009-12-19 (Innovation)
- NEP-IPR-2009-12-19 (Intellectual Property Rights)
- NEP-MIC-2009-12-19 (Microeconomics)
- NEP-TID-2009-12-19 (Technology & Industrial Dynamics)
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