be the best field to study analysis of R&D and marketing because they are one of the highest spending industries in both categories. The industry spends about 15 percent of sales on marketing and 16 percent of sales on R&D (Lakdawalla, 2012, page 153). Their study showed that a month after the patent expires the price began to decline for all drugs. For drugs that were not advertised the quantity began to steadily rise, while the quantity appeared flat for advertised drugs after the patent expired. The patent design is a trade-off between innovation incentives and static welfare. They can improve the efficiency of marketing incentives and generate a consistent value for consumers and can even offset the standard monopoly losses from patents.

III. Role of the FDA
The first possible reason for the sudden price increase can be associated with the increased regulations of the FDA back in 2009. Typically, it can cost as much as $10 million for a company to get a drug approved for the market, which is no small fee. While it can be argued that the i...