Removing patents reduces cost of medicines

Methodology note: Removing patents leads to a two-thirds reduction in the cost of medicines

14 June 2024

New analysis by the PMA finds that the removal of patents led to a two-thirds reduction in the cost of certain medicines.

We analysed a study by M. Serra-Burriel et al. which looked into the effects of patent expiration on drug prices in the US, UK, Canada, Australia, Japan, France, Germany, and Switzerland. The study “estimated significant decline in drug prices after patent expiration, ranging from 30 to 80% depending on the country eight years after patent expiration.” The study can be found here:

We also analysed a study by A. Cameron et al. which found out that “The percentage difference in price between originator brands and lowest-priced generics (brand premium) in the private sector was over 300% in lower-middle income countries and low-income countries, whereas in upper-middle income countries it was substantially lower (152%)…” based on data from Chad, China, El Salvador, Ethiopia, Fiji, Ghana, India, Indonesia, Jordan, Kenya, Kyrgyzstan, Mali, Mongolia, Morocco, Nigeria, Pakistan, Peru, Philippines, Sudan, Syria, Tajikistan, Tanzania, Tunisia, Uganda, Uzbekistan, Yemen (low- and lower-middle income countries) and Kazakhstan, Lebanon and Malaysia (upper-middle income countries).
The study can be found here:

Lastly, we based our analysis on data provided by the US Food and Drug Administration, according to which “five generics competing are associated with prices drops of nearly 85%” in the US.
The FDA article can be found here:

Together, these three studies covered 37 countries.

Based on the data from the first article, we calculated that an average of 30-80% price decrease is 55%.

Based on the data from the second article, we calculated that the average price difference in low- and lower-middle income countries (300%) and upper-middle income countries (152%) was 226% and that the price of lowest-priced generics was on average 55.7% lower in those countries than originator brands (the price of a patented medicine was 2.26 times as big as the generic which means that the generic price is 44.3% of the patented medicine price. This means that a generic is 55.7% cheaper than a patented medicine).

Combining the data from all three sources, we found an average of 55%, 55.7% and 85% which is around 65.2%. Based on this number, we say that “the removal of patents led to a 2/3rds reduction in the cost”.