ABSTRACT
This chapter examines the pharmaceutical industry's monopoly power, in particular researching whether such power exists. Empirical support for proposition 1 emerges from looking early on at the mean of the pharmaceutical industry's profit margin in conjunction with its standard deviation and how this corresponds to the manufacturing sector. The South African subsidiary is engaged in the manufacture of pharmaceutical products in South Africa, this activity would usually be recorded under the manufacturing data. If an industry is deemed to be uncompetitive, the charge must be based on the presence of monopoly power on either or both of the supply and demand sides of the market. If proposition 2 holds, then over time we should observe the pharmaceutical industry's profit, as expressed by its expected profit margin (GPp), to be cyclical around the perfectly competitive or normal profit level taken as the average profit margin for the manufacturing sector as a whole.
