> drug makers trivially re-formulate their drug upon patent expiration in such a way that the old medicine cannot be made generically without also infringing on the new patent
This seems to happen in the pharmaceutical industry too often. Not only this, drug companies also inflate the pricing on the older medication so that people will switch to the newer variety.
I think this is called price discrimination[1]. Joel wrote a good article on this topic called Camels and Rubber Duckies[2]. Here is a quote:
>You see, by setting the price at $220, we managed to sell, let's say, 233 copies of the software, at a total profit of $43,105, which is all good and fine, but something is distracting me: all those people who were all ready to pay more, like those 12 fine souls who would have paid a full $399, and yet, we're only charging them $220 just like everyone else!
>The difference between $399 and $220, i.e., $179, is called consumer surplus. It's the extra value that those rich consumers got from their purchase that they would have been perfectly happy to do without.
>It's sort of like if you were all set to buy that new merino wool sweater, and you thought it was going to cost $70, which is well worth it, and when you got to Banana Republic it was on sale for only $50! Now you have an extra $20 in found money that you would have been perfectly happy to give to the Banana Republicans!
This seems to happen in the pharmaceutical industry too often. Not only this, drug companies also inflate the pricing on the older medication so that people will switch to the newer variety.