Monday, March 7, 2011

Patents and drug companies -- bad news for the bottom line, and maybe a new business model

There's a great article from yesterday's NY Times noting the impending expiration this year of Pfizer's Lipitor and several other "blockbuster" drugs.

The long and short of it is that drug companies are finding that their traditional business model, which is to spend millions of dollars developing patentable drugs, then making the money back (plus a healthy profit!) from the proceeds of their patent monopoly, is failing them as governments and consumers push for cheaper drugs.

It's a tough question!  This is one of those tricky areas where ethics and economics can appear to clash.  Should we rely on private drug companies to develop medicines?  If so, should we seek to restrict the cost of the medicines they develop?  If not, who will step in to pay for R&D for the next generation of drugs?

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