Problem: Pharmaceutical companies can expect to earn large profits from blockbuster drugs (for high blood pressure, depression, ulcers, allergies, sexual dysfunction) while under patent protection. What is the source of these profits? Upon patent expiration, numerous rival drug companies offer generic versions of the drug to consumers. (The original developer continues to market the drug under its trade name and usually offers a second generic version of the drug as well.) Discuss the effect of patient expiration on the market structure, pricing, and profitability for the drug.