Patents create a monopoly because only one company or individual is capable of manufacturing a product. This prevents other producers from entering the market. This concept is particularly restrictive when the demand for the product is inelastic; If the product has no substitute, the monopoly producer is able to set a price that may not be affordable for the consumer. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay When the patent expires, other producers can freely enter and exit the market, this creates competition within the market. Substitute products are now available to the consumer and the market can naturally set an equilibrium price. The pharmaceutical industry is a great example of this concept. When a drug is released to the market with a patent, only one company is able to produce it. If this medicine is necessary for the consumer, his demand is inelastic and he must pay the price set by the company. When the patent expires, drugs may become available in generic form. If the original patent owner wins compensation for delay, even though these contracts are sometimes overturned by the U.S. court system, the company will continue to produce the drug as a monopoly. These payment-for-delay strategies have a negative effect on consumers because the market cannot reach an equilibrium price; consumers are forced to pay for a product they cannot afford. The monopolistic firm takes advantage of the consumer's inelastic demand for the drug and exploits consumers who need a product. Keep in mind: this is just a sample. Get a personalized article from our expert writers now. Get a Custom Essay In my opinion, this pay off strategy should be banned. This creates a system that exploits the sick and elderly and prevents the health care industry from moving forward. Medicines should be widely available and keeping prices high is unethical. Medicines should be set at an equilibrium price, just like most other goods that consumers need on a daily basis. Pharmaceuticals are not luxury goods and the U.S. economy should not treat them as such..