How should we support pharmaceutical innovation?

Paul Grootendorst

Social and Economic Dimensions of an Aging Population Research Papers from McMaster University

Abstract: The question as to how society should support pharmaceutical (‘pharma’) innovation is both pertinent and timely: Pharma drugs are an integral component of modern health care and hold the promise to treat more effectively various debilitating health problems. The rate of pharma innovation, however, has declined since the 1980s. Many observers question whether the patent system is capable of providing the appropriate incentives for pharma innovation and point to several promising alternative mechanisms. These mechanisms include both ‘push’ programs – subsidies directed towards the cost of pharma R&D – and ‘pull’ programs – lumpsum rewards for the outputs of pharma R&D, that is, new drugs. I review evidence why our current system of pharma patents is defective and outline the various alternative mechanisms that may spur pharma innovation more effectively.

Keywords: Pharmaceuticals; R&D; patents; prizes; innovation (search for similar items in EconPapers)
JEL-codes: I18 O34 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2009-05
New Economics Papers: this item is included in nep-ino, nep-ipr, nep-pr~, nep-knm and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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