The pharmaceutical industry and its patent

Expert replies

rx_11: Senior | Next Rank: 100 Posts; Posts: 87; Joined: Mon May 17, 2010 12:31 am; Thanked: 7 times; GMAT Score:690

by rx_11 » Thu Nov 18, 2010 7:59 am

The pharmaceutical industry argues that because new drugs will not be developed unless heavy development costs can be recouped in later sales, the current 20 years of protection provided by patents should be extended in the case of newly developed drugs. However, in other industries new-product development continues despite high development costs, a fact that indicates that the extension is unnecessary.

Which of the following, if true, most strongly supports the pharmaceutical industry's argument against the
challenge made above?

(A) No industries other than the pharmaceutical industry have asked for an extension of the 20-year limit on
patent protection.
(B) Clinical trials of new drugs, which occur after the patent is granted and before the new drug can be
marketed, often now take as long as 10 years to complete.
(C) There are several industries in which the ratio of research and development costs to revenues is higher
than it is in the pharmaceutical industry.
(D) An existing patent for a drug does not legally prevent pharmaceutical companies from bringing to market
alternative drugs, provided they are sufficiently dissimilar to the patented drug.
(E) Much recent industrial innovation has occurred in products-for example, in the computer and electronics
industries-for which patent protection is often very ineffective

OA is B

Hi, everyone

I got completely stucked with this question. Hope anyone can help me.

I can't understand why this one is correct answer. The OE says this choice tells us why pharmaceutical industry is different from other industries. However, I can't understand this because B just tells us it takes 10 years to test a new drug, but we don't know anything about products of other industries. What if a computer takes 15 years to test? So I can't find why the pharmaceutical industry is different from other industries and why the patents should be extended.

Anyone can help me?

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Source: Beat The GMAT — Critical Reasoning | Thu Nov 18, 2010 7:59 am

Tani: Legendary Member; Posts: 1255; Joined: Fri Nov 07, 2008 2:08 pmFollowed by: 90 members; Location: St. Louis; Thanked: 312 times

by Tani » Thu Nov 18, 2010 8:56 am

The argument doesn't say that the pharmaceutical industry is the only one that needs protection, it simply says that it needs protection because the costs are high and there are long delays before the products can be marketed. Any other industry with similar delays could request similar protection. A computer that took ten years to test would be justified in using the same argument.

Focus on what the companies are saying..."we need the protection", not "no one else is entitled to protection". You only have to justify the argument for pharmaceuticals, not against everyone else.

Tani Wolff

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pradeepkaushal9518: Legendary Member; Posts: 1309; Joined: Wed Mar 17, 2010 11:41 pmFollowed by: 5 members; Thanked: 33 times

by pradeepkaushal9518 » Thu Nov 18, 2010 9:53 am

this is i think og question and answer i remeber is B.

A SMALL TOWN GUY

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rx_11: Senior | Next Rank: 100 Posts; Posts: 87; Joined: Mon May 17, 2010 12:31 am; Thanked: 7 times; GMAT Score:690

by rx_11 » Thu Nov 18, 2010 10:23 pm

Hi, expert,

But it only takes about 10 years to complete trials, and the protection is 20 years. Hence, the new drug still has 10 years to be protected. So why should the 20-year protection be farther extended? I find the fact B says is not sufficient to convince me that we should extend 20-year protection.

Can you clarify this??

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shovan85: Community Manager; Posts: 991; Joined: Thu Sep 23, 2010 6:19 amFollowed by: 24 members; Location: Bangalore, India; Thanked: 146 times

by shovan85 » Thu Nov 18, 2010 10:45 pm

rx_11 wrote:Hi, expert,

But it only takes about 10 years to complete trials, and the protection is 20 years. Hence, the new drug still has 10 years to be protected. So why should the 20-year protection be farther extended? I find the fact B says is not sufficient to convince me that we should extend 20-year protection.

Can you clarify this??

The current protection year is 20 years. But why the pharmaceutical industry wants extension? This could be because though they have been given protection for 20 years they are effectively getting less than that 20 years.

Option B: we know for sure is that the 20-year patent term is effectively 10 years long, because the companies can't make any profits off their products during clinical trial period.

alternatively we can say that the patent period is effectively half as long as it's supposed to be, clearly strengthening the pharmaceutical industry's argument for an extension of the patent period.

If the problem is Easy Respect it, if the problem is tough Attack it

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frank1: Legendary Member; Posts: 537; Joined: Fri Jan 22, 2010 10:06 pmFollowed by: 1 member; Thanked: 14 times

by frank1 » Fri Nov 19, 2010 2:03 am

and i think another thing to be noted...
just for gmat answer solving

Except B , all option i.e A,C,E supports that it should not extended and even D supports it indirectly ....
so B stands...
and reason for B has been given above.

thanks

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