The Effect of Patents on Drug Prices

The NYT has a good article on how patents enable drug companies to keep prices high – far higher than in other countries.

For example, with the patent for the older oral contraceptive Loestrin 24Fe about to expire, the company Warner Chilcott stopped making the pill this year and introduced a chewable version — with a new patent and an expensive promotional campaign urging patients and doctors to switch. While many insurance plans covered the popular older drug with little or no co-payment, they often exclude the new pills, leaving patients covering the full monthly cost of about $100. Patients complained that the new pills tasted awful and were confused about whether they could just be swallowed.