Almost every day, the daily press reports about companies who have seen their patents under threat from competitors or even copied already. The latest example is the dispute between Apple and Samsung. In the pharmaceutical field, there are companies that specialize in the „copying of drug compositions“, so that immediately after the expiration of patents, big corporations get a lower price on the market from generic manufacturers.
From the perspective of health insurers, this is a real blessing because the supply of generics produces substantial cost savings in drug spending. It also means that the competitive advantage achieved by getting expensive patents by the big pharmaceutical companies is caught up with immediately upon their expiration. The interaction between innovation and imitation, however, forms an essential element in a company’s competitive dynamics, and is a driving force for research and development and investment in the industry.
In 2012 alone, pharmaceutical brands will lose patent protection on a sales volume worth EUR 30 billion. This market share is thus redistributed between competitors. It can also be observed that the share of generic products in the total pharmaceuticals market has been growing steadily in the past as well, driven by savings efforts, and will continue to rise.
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