Patent Monopolies and the Costs of Mismarketing Drugs

Dean Baker Ravi Katari
Authors registered in the RePEc Author Service: Dean Baker and Ravi Katari

CEPR Reports and Issue Briefs from Center for Economic and Policy Research (CEPR)

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.

Keywords: trade deficit; pharmaceuticals; off-label; rent-seeking; mismarketing; Vioxx; Avandia; Bextra; OxyContin; Zyprexa; Pfizer; Merck; GlaxoSmithKline; Eli Lilly; Purdue (search for similar items in EconPapers)
JEL-codes: I I1 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2015-04
New Economics Papers: this item is included in nep-com, nep-hea and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:epo:papers:2015-11

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