The willingness of governments to override the protection of intellectual property embodied in patent law may lead to less innovation in the future, warns Frank R. Lichtenberg of the Columbia University Graduate School of Business and National Bureau of Economic Research.
This is true particularly in pharmaceutical research, where certain governments have shown a willingness to ignore patent protections when the price or availability of a desired drug concerns them. For example, Canada ordered the anti-anthrax drug Cipro from a generic manufacturer at one point, later ending the practice and going back to the patent owner. In the United States, Senator. Charles Schumer proposed ignoring the patent, although nothing came of the proposal.
Weakening patent protection may have a chilling effect on private research and development investment, and therefore reduce the health and wealth of future generations. That is because spending on R&D depends on the expectation of future returns. And the actions of government can affect those expectations:
Pharmaceutical firms rely more on patent protection than firms in other industries. Edwin Mansfield found that 65 percent of pharmaceutical inventions would not have been introduced if patent protection could not have been obtained; for the 11 other industries he studied, this percentage was only 8 percent.
Source: Frank R. Lichtenberg, Cipro and the Risks of Violating Pharmaceutical Patents, Brief Analysis No. 380, November 15, 2001, NCPA.
For text http://www.ncpa.org/pub/ba/ba380/
For more on Pharmaceutical Research http://www.ncpa.org/iss/hea/
FMF Policy Bulletin\20 November 2001
