Drug Patents Give Companies Like GlaxoSmithKline Incentive to LiePublished: 15 July 2010
"A NYT editorial ( http://www.nytimes.com/2010/07/15/opinion/15thu1.html?ref=op... ) commented on evidence that the drug maker GlaxoSmithKline had concealed negative research findings on its diabetes drug Avandia:
"'The clearest lesson to emerge from the hearings and other recent revelations is that GlaxoSmithKline, the maker of Avandia, can’t be trusted to report adverse clinical results fairly. The company must be watched like a hawk as additional trials that it sponsors go forward.'
"Arghhhhhhhhhhhhhhhh! Doesn't the NYT believe in the profit motive and incentives? The patent system, by granting monopolies that raise prices several thousand percent above the cost of production, gives drug companies an enormous incentive to conceal negative research findings. As long as these perverse incentives exist, then we have to watch every drug company like a hawk.
"Maybe some wacko socialists think that drug companies will act for the public good and willingly forego vast profits, but those who believe on markets and economics know that drug companies will try to get away with anything they can get away with. One day maybe an iota of original thought will be allowed into public policy debates on the patent system, but we haven't gotten there yet."
http://www.cepr.net/blogs/beat-the-press/drug-patents-give-c...
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Pharmaceutical Company Invented Diseases, One of the Incentives Provided by Patent Monopolies
http://www.cepr.net/blogs/beat-the-press/pharmaceutical-comp...
Tufts Economist Documents Inefficiency of Patent System for Financing Drug Research
http://www.cepr.net/blogs/beat-the-press/tufts-economist-doc...
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Patent Monopolies and the Costs of Mismarketing Drugs
April 2015, Ravi Katari and Dean Baker
Abstract: "Patent monopolies have long been used as a mechanism for financing innovation and research. The logic is that the government awards a monopoly on a product or process for a limited period of time in order to reward innovation. However, in addition to providing incentives for innovation and research, patent monopolies also provide incentives for a wide-range of rent-seeking behaviors, many of which can have major social costs. This paper attempts to calculate one category of these costs for prescription drugs. It produces estimates of the costs associated with mismarketing drugs. The estimates are based on assessments of the costs in the form of increased morbidity and mortality associated with five prominent cases of mismarketing over the last two decades."
http://www.cepr.net/publications/reports/patent-monopolies-a...