Drug Patents
When a drug is first released on the market, there is already a patent serving as a protection to the company which first made the initial investments against others who want to replicate their product. Therefore no other manufacturer is allowed to copy it. Drug patents, however, can expire and when they do, generic versions can be produced by any pharmaceutical company. There is no way to renew a patent once it expires. The length of time before a patent expires can vary, but is usually 20 years .In theory this should provide the innovator with enough time to recover the initial costs of developing the new drug, but since patents must be applied before the start of the clinical trial process, sometimes the effective life of drug patents is very short and there are even cases when pharmaceutical companies decide not to release a drug when the actual patent protection on the market is less than 5 years.After the patent expires, the drug does not need to be re-tested and re-approved. Because of this, generic drug companies are left only with the cost of manufacturing which is usually much lower than the initial investments.