23 ms·
>However, monopoly protections conflict with the need for preservation by encouraging companies to sell as much of the new drug as possible. That is completely
by mistercow 14y ago
>However, monopoly protections conflict with the need for preservation by encouraging companies to sell as much of the new drug as possible.
That is completely nonsensical economic reasoning. A monopoly reduces availability. Less competition => higher prices => lower quantity demanded.
- conanite 14y agoMy interpretation of that sentence was that, with limited-time monopoly protection, it's in the producer's interest to sell as much of the stuff as possible before the monopoly ends, after which point it won't be possible to make significant profits from the same product. I haven't yet figured out whether this makes sense.
- mistercow 14y agoHmm, so the idea is that a company will actually sell below the price you'd later see in a competitive market? That's an interesting proposition, but it doesn't hold water. Is it possible in theory? I doubt it, but I can't disprove it off the top of my head. But it just doesn't happen in the pharma industry. When a drug patent runs out, generics come out and the price drops dramatically, every single time. It is true that name brand prices do actually increase when patents expire, but not the generic prices, and that means that quantity supplied will certainly increase once generics are introduced.