It costs $1 million in R&D to develop a new diabetes treatment. The marginal cost of producing and marketing a treatment, once discovered, is $10. Suppose that Pfizer currently is selling a treatment that is covered by a valid patent, which is set to expire in one year. What is the most likely outcome of a proposed law that would allow generic drug companies to enter any market 5 years before the expiration of the patent covering it? A. More diabetics would use the treatment Pfizer invented, and drug companies would invest more in R&D for future treatments B. Fewer diabetics would use the treatment Pfizer invented, and drug companies would invest more in R&D for future treatments C. More diabetics would use the treatment Pfizer invented, and drug companies would invest less in R&D for future treatments D. Fewer diabetics would use the treatment Pfizer invented, and drug companies would invest less in R&D for future treatments
It costs $1 million in R&D to develop a new diabetes treatment. The marginal cost of producing and marketing a treatment, once discovered, is $10. Suppose that Pfizer currently is selling a treatment that is covered by a valid patent, which is set to expire in one year. What is the most likely outcome of a proposed law that would allow generic drug companies to enter any market 5 years before the expiration of the patent covering it?
| A. |
More diabetics would use the treatment Pfizer invented, and drug companies would invest more in R&D for future treatments
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| B. |
Fewer diabetics would use the treatment Pfizer invented, and drug companies would invest more in R&D for future treatments
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| C. |
More diabetics would use the treatment Pfizer invented, and drug companies would invest less in R&D for future treatments
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| D. |
Fewer diabetics would use the treatment Pfizer invented, and drug companies would invest less in R&D for future treatments
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