Big pharma and monopoly capitalism: A long-term view

Giovanni Dosi, Luigi Marengo, Jacopo Staccioli and Maria Enrica Virgillito

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: Are IPRs institutions meant to foster innovative activities or conversely to secure appropriation and profitability? Taking stock of a long-term empirical evidence on the pharmaceutical sector in the US, we can hardly support IPRs intended as an innovation rewarding institution. According to our analysis, pharma patents have constituted legal barriers to protect intellectual monopolies rather than an incentive and a reward to innovative efforts. Patenting strategies appear to be quite aggressive in extending knowledge borders and enlarging the space protected from the possibility of infringements. This is also witnessed by the fact that patent applications are very skewed in the covered trade names and patent thickness expands over time. Conversely, the number of patents protecting new drugs approved by the FDA which draw upon government-sponsored research - as such a mark for quality - falls. Firm-level analysis on profitability confirms strong correlation, restricted to listed pharmaceutical firms, between patent portfolio and profit margins.

Keywords: Intellectual property rights; patents; pharmaceutical industry. (search for similar items in EconPapers)
Date: 2021-08-11
New Economics Papers: this item is included in nep-cwa, nep-ino, nep-ipr, nep-isf and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Big Pharma and monopoly capitalism: A long-term view (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2021/26

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