SPECIAL INTEREST POLITICS AND INTELLECTUAL PROPERTY RIGHTS: AN ECONOMIC ANALYSIS OF STRENGTHENING PATENT PROTECTION IN THE PHARMACEUTICAL INDUSTRY

Angus Chu

Economics and Politics, 2008, vol. 20, issue 2, 185-215

Abstract: Since the 1980s, the pharmaceutical industry has benefited substantially from a series of policy changes that have strengthened the patent protection for brand‐name drugs as a result of the industry's political influence. This paper incorporates special interest politics into a quality‐ladder model to analyze the policy‐makers' tradeoff between the socially optimal patent length and campaign contributions. The welfare analysis suggests that the presence of a pharmaceutical lobby distorting patent protection is socially undesirable in a closed‐economy setting but may improve social welfare in a multi‐country setting, which features an additional efficiency tradeoff between monopolistic distortion and international free riding on innovations.

Date: 2008
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https://doi.org/10.1111/j.1468-0343.2007.00328.x

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Working Paper: Special Interest Politics and Intellectual Property Rights: An Economic Analysis of Strengthening Patent Protection in the Pharmaceutical Industry (2007)
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