In 1993, Purdue Pharmaceuticals of Stamford, Conn.applied for the first in a series of patents on Oxycontin, a painkiller.The U.S.Patent and Trademark Office (PTO) granted those patents based on the manufacturer's contention that the drug contained a novel innovation: It had been engineered so that only a very small dose was required for the drug to be effective for 90 percent of patients.Seven years later, a generic drug maker, Endo Pharmaceuticals, applied to the FDA for permission to sell its own, lower-priced version of Oxycontin.Purdue's patents acted as a(n) _____ and prevented Endo from entering the market.

Question

Quizplus · Accepted Answer

Purdue's patents on Oxycontin served as a barrier to entry, preventing Endo Pharmaceuticals from entering the market with a generic, lower-priced version of the drug. Patents protect the intellectual property of the original developer, in this case, Purdue Pharmaceuticals, thereby limiting competition.