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Against Monopoly

defending the right to innovate

Pharmaceutical Patents

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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Against Monopoly

A paper Peter J. Huckfeldt and Christopher R. Knittel examining generic entry. Not a great advertisement for patents:

We study the effects of generic entry on prices and utilization using both event study models that exploit the differential timing of generic entry across drug molecules and cast studies. Our analysis examines drugs treating hypertension, high blood pressure, type 2 diabetes, and depression using price and utilization data from the Medical Expenditure Panel Survey. We find that utilization of drug molecules starts decreasing in the two years prior to generic entry and continues to decrease in the years following generic entry, despite decreases in prices offered by generic versions of a drug. This decrease coincides with the market entry and increased utilization of branded reformulations of a drug going off patent. We show case study evidence that utilization patterns coincide with changes in marketing by branded drug manufacturers. While the reformulations---often extended-release versions of the patent-expiring drug---offer potential health benefits, the FDA does not require evidence that the reformulations are improvements over the previous drug in order to grant a patent. Indeed, in a number of experiments comparing the efficacies of the patent-expiring and reformulated drugs do not find statistical differences in health outcomes calling into question the patent-extension policy.

Comments

Typo or ignorance? The FDA does not grant patents nor do they have anything to do with patents. Making such a fundamental error suggests the so-called researchers have made other errors of significance.
Justin:

Actually, YOU do not know that it takes over 300 patents to manufacture diapers either. It was Kimberly-Clark's competitor that alleges that Kimberly-Clark has over 300 patents that relate to disposable diaper manufacture. That may or may not be true, as the court case could determine.

This research paper on genetic patents has attracted a lot of controversy. The Supreme court has just ruled that human and other genes are not patentable.


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