American Society of Law, Medicine & Ethics
At last count, global pharmaceutical spending exceeded $750 billion. Unlike most medical products and services, many pharmaceuticals are sold at a price that greatly exceeds marginal cost. AIDS medicines that retail for over $10,000 per person per year in the United States can be produced generically at a marginal cost of less than $150. Patents and other related IP rights create these significant gaps between marginal cost and retail price, generating many billions of dollars in profits (patent rents) for companies.
Pharmaceutical Innovation: Law & the Public's Health
Journal of Law, Medicine & Ethics
Available at: https://scholarship.law.bu.edu/faculty_scholarship/1904