I don't disagree with your assessment. (3) is a major factor in drug shortages.
There is room to innovate in the generic drug industry. Most generic drug manufacturers have R&D budgets aimed at reducing the cost of manufacturing.
However, the generic drug market is an odd one. It all comes down to price and some companies price certain generics at below cost (i.e. loss leaders) in order to gain other business.
The most interesting quote I've read was from Barry Sherman who runs Apotex, one of the biggest generic drug makers. I don't have the quote in front of me, but to sum it up: "I rarely make any profit on any of my drugs. Most of my profit comes from patent settlements and court cases I win again the branded drug makers."
Comments
I don't disagree with your assessment. (3) is a major factor in drug shortages.
There is room to innovate in the generic drug industry. Most generic drug manufacturers have R&D budgets aimed at reducing the cost of manufacturing.
However, the generic drug market is an odd one. It all comes down to price and some companies price certain generics at below cost (i.e. loss leaders) in order to gain other business.
The most interesting quote I've read was from Barry Sherman who runs Apotex, one of the biggest generic drug makers. I don't have the quote in front of me, but to sum it up: "I rarely make any profit on any of my drugs. Most of my profit comes from patent settlements and court cases I win again the branded drug makers."