Assignment:
Drug Companies and Patents: The Games they Play
Discusses patents and how they create a barrier to entry. A U.S. Supreme Court case was brought by the US Federal Trade Commission to halt the pay-for-delay tactics sometimes used by pharmaceutical companies to contractually extend the effective patent period of pharmaceutical drugs.
The pay-for-delay tactics are more fully described in Federal Trade Commission, "Pay-forDelay: How Drug Company Pay-Offs Cost Consumers Billions". Staff Study, January 2010.
A recent Supreme Court outcome is discussed in Edward Wyatt, "Supreme Court Lets Reg-ulators Sue Over Generic Drug Deals", New York Times, June 17, 2013. (NY Times link)
After reading these articles:
1. Explain how a patent creates a kind of monopoly and what benefits a patent conveys to the owner.
2. Explain what happens in a market when patent protection for a technology runs out.
3. Explain the effects of pay-for-delay actions on producers and consumers.
4. Discuss whether pay-for-delay tactics should no longer be allowed, or should continue.
Be sure to support your conclusion using economic arguments.