Patents, Public-Private Partnerships or Prizes – 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 productivity of the pharma R&D enterprise, however, has declined since the 1980s. Many observers question whether the patent system is conducive to 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 and royalty-based 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: 41 pages
Date: 2009-07
New Economics Papers: this item is included in nep-ino, nep-ipr and nep-pr~
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