The Research On The Pricing Mechanism Of Non-patent Drugs

As a special commodity in the health care system, drugs play a vital role in disease prevention, diagnosis, therapy and improvement of the human body functions. The innovation and development of drugs has contributed to the prolongation of human life expectancy and improved quality of life. As the global intellectual property protection efforts have been enhanced, national pharmaceutical patent protection system has improved steadily and plays a critical role in promoting pharmaceutical innovation. Pharmaceutical patent protection provides a strong legal basis for original patented drags in order to maintain higher prices, to cover research costs of pharmaceutical companies as well as maintain their R&D enthusiasm. When the original patented drugs exceed their patent protection periods, other pharmaceutical manufacturers have the right to imitating the drugs, at that time, there will be a large number of generic drugs and original patented drugs over the patent protection contending in the market simultaneously.The prices of original patented drugs over the patent protection should decrease, because the original market exclusivity of a patent of the original patented drugs no longer enjoys the protection of the law. However, China’s pricing policy for the management of this type of drug prices lacks of systematic guidance, coupled with the uncompetitiveness of domestic generic drugs, the prices of original patented drugs over the patent protection period are much higher than the generic drugs.Original patented drugs over the patent protection period stay in a special categry in the entire drug price management system, the production of such drugs takes a long development cycle and huge R&D costs, thus such drugs should be not only highrisk-oriented and highinvestment-oriented, but also highprofits-oriented. Compared with generic drugs, original patented drugs over the patent protection period have a higher level in novelty, product quality and clinical effects. Therefore, prices of original patented drugs over the patent protection period should reflect their excellent quality in order to encourage pharmaceutical companies to continue researches and innovation. At the same time, due to reliable quality, efficacy, and low elasticity of price and demand in specific areas of treatment of original patented drugs over the patent protection period, high prices of such drugs will bring patients with heavy medication burden and detriment to patients’health interests. Therefore, how to make prices of original patented drugs over the patent protection period becomes a dilemma. Generic drugs can greatly reduce the medication burden of patients because of their relatively inexpensive prices. Limited by their quality and other aspects, generic drugs remain uncompetitive. How to make prices for generic drugs and how to keep a reasonable price gap between generic drugs and original patented drugs over the patent protection period, in order to encourage generic drugs manufacturers to improve the production process, to improve medicine quality, to occupy a higher market share, to guarantee medicine accessibility and to maintain patients benefits, is another challenge in front of us.Therefore, the design of scientific pricing system for original patented drugs over the patent protection period and generic drugs in order to keep a reasonable gap between the two is a realistic choice, which promotes sustainable and healthy development of the pharmaceutical industry and ensures the realization of the medication demands of patients timely and effectively. Based on pricing practices and characteristics of this research, this article combines the concept of "original patented drugs over the patent protection period" with "generic drugs", proposes the concept of "non-patent drugs" and evaluates the pharmaceutical patent protection system. By comparing the realistic price difference situation between original patented drugs over the patent protection period and generic drugs, this article summarizes the problems and difficulties in the pricing of non-patent drugs. Based on these problems and difficulties, this article conducts targeted research about representative countries, including Britain, France, Canada and Japan, and their generic drugs pricing policies and summarizes the enlightenment experience of these countries. Finally, through two angles from the direct pricing mechanism and bargaining mechanisms, this article makes a preliminary design of the pricing mechanism of original patented drugs over the patent protection period, offers management ideas about the price of generic drugs and put forward some specific policy proposals, such as improving legislation, strengthening the management of drug prices institutional capacity building, enhancing coordination among various departments, building the international price comparison mechanism and promoting the price management mechanism as well as related systems.