[KoftaBob]

If I'm understanding correctly, once a drug patent expires there are 2 possibilities:

1) The FDA grants a single company the exclusive right to manufacture, distribute, market and sell a generic version of a drug. In this case, the price will be lower than the brand drug, but not by much, since there's only one maker and no competition.

2) Several drug companies are allowed to design their own versions of the brand drug. Because there are several competing brands with essentially the same product in the marketplace, competition causes the prices drop.

If your company targets the first type, you replace another company as the sole producer of the generic, and there's still no competition to drive the price down.

If you target the second type, you become an additional competitor to the other generic drug makers, so the market gets a bit more competitive, but the prices in theory were already competitive because of the number of makers. For example, the Lexapro generic Escitalopram has many makers, so you can get it for as low as $10.

So in terms of generics, the options are either single source agreements where pricing won't be competitive by design, or multiple makers, where the pricing is likely already competitive. Having said that, which of those does your company want to target, and how do they plan to tackle it?

[thw0rted]

I don't know if this question was asked before the question was asked upthread ("how do we know you won't cave to investor pressure to raise profits?", basically) but the answer was that they're chartered as a "public benefit corporation" and that comes with a legal requirement to "maintain the social mission". So, if they're targeting the first type, the theory is that you don't need market pressure to drive the price down because they're only "allowed" to make enough margin to cover expenses.

[randcraw]

If they target the first type, won't there be TWO competitors where there used to be a monopoly? Shouldn't prices then come down? As to the second type, just because there's an oligopoly doesn't mean competition will ensue and prices must drop. Look at the insane price on insulins.

I suspect their intended mission is to cover their costs with only a modest profit and thereby drive down prices where they are most inflated.

Given the proliferation of people like Martin Shkreli and companies like Purdue, there's a lot of pharmaceutical fruit out there to be pulled down and made low hanging once more.