Study on free market and competition in the expired-patent drug markets in Mexico. COFECE 2017

Published: 2017

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Patents are important because they stimulate the introduction of better drugs into the market. When granting the right to innovative laboratories to exclude others from the exploitation of the patented invention, for a non-extendable period of 20 years, they incentivize the development of better products. But once the patent expires, other laboratories may produce and trade generic versions, which, theoretically, may discipline the market and make drugs available to a larger public, at a lower price. Generic drug products may be divided into branded generic drugs, (i.e., those identified by their commercial or distinctive name), and unbranded generic drugs (which are commercialized under the generic name that indicates the active substance contained in the product). Additionally, drugs may be classified by the number of suppliers: those having a single supplier are called single-source, and those having more than one supplier in the market are called multiple-source.