Author Question: Brand Name Drug Industry Dynamics Market approval in the US for new pharmaceutical products is a ... (Read 109 times)

fnuegbu · **on:** Jul 1, 2018

Brand Name Drug Industry Dynamics Market approval in the US for new pharmaceutical products is a long, arduous, and expensive process. Once approved, patent protection keeps close substitute products from entering for some years. If the demand for a particular product is stable, what would you predict for the profitability after approval and prior to patent expiration?

Question 2

This factor contributes to the winner's curse
a. your estimate of the value of the object was not the most optimistic
b. your bid was the highest
c. there were not many other bidders you had to beat out
d. you shaded your bid too much

ebenov · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

The prices and profits should be relatively constant over this period. There may be an initial period when the drug maker must inform the potential customers of the benefits of this product that will make demand and prices lower. But, after that, these firms enjoy a stable monopoly.

Answer to Question 2

b