​Generic Drug Industry Dynamics

question 53

Essay

​Generic Drug Industry Dynamics
When a brand name drug's patent protection expires,many generic producers are usually ready to enter the market.These firms' products are close substitutes,they have similar production technologies,the regulatory hurdles to enter are not so great,and,within a few months,there are plenty of rivals.What would you predict for the profitability during these first few months after generic drug entry?

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Definitions:

Management Discussion and Analysis

A section in an annual report where management provides an overview of the previous period's operations, current financial status and future outlook.

Dividends per Share

The amount of money a company pays out to its shareholders for each share they own during a specific period.

Earnings per Share

A financial ratio that divides a company's net profit by the number of its outstanding shares, indicating how much money each share makes.

Price-Earnings Ratio

A valuation metric for a company, calculated as its current share price divided by its per-share earnings.