Branded drug pricing when generics arrive

When a drug's patent runs out, why might its maker actually raise the price?

Because the remaining customers are price-insensitive. Once generics enter, price-sensitive buyers switch to them, leaving the brand with loyal patients and doctors who value familiarity and are less responsive to price. Facing this more inelastic demand, the profit-maximising response can be a higher price on lower volume, a form of market segmentation.