HM820 - Class 6 (Pharma strategies)

Question 1

What is the Generic Paradox

Answer 1

The price of branded products tends to rise around patent expiration.

Question 2

product hopping

Answer 2

Attempting to shift patients from a product about to go off patent to one that will not expire until later.

Example: A company coming out with a me-too products (longer release, new delivery etc) and switch patients over to it before their other drug goes off patent.

Question 3

What is larger, the profits of a monopolist or the sum of the profits of duopolists?

Answer 3

A monopolists profits.

So the monopolist/incombant will outbid the new entrants because they have a higher willingness to pay.