Big gain for Generic Drug Companies

25 October, 2005

More than $38 billion worth of drug revenue is expected to lose patent protection through 2008 and as a result, consumers will be able to save $20 billion in drug costs. Meanwhile generic drug companies stand to gain about $8 billion over the next three to five years according to Casey Alexander, an analyst for Gilford Securities, Inc.

Drug prices drop about 20 percent during the first six months after they lose patent protection. The first generic drug company to file with the Food and Drug Administration for a generic license is granted first-to-file production rights for six months. During that time, only the lead generic maker and the drug maker who held the patent produce the drug. After the half-year expires, production opens to other generic makers and the drug's price plummets again.

To read more:
http://money.cnn.com/2005/10/25/news/midcaps/generic/