How should we support pharmaceutical innovation?
AbstractThe 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by McMaster University in its series Social and Economic Dimensions of an Aging Population Research Papers with number 246.
Length: 25 pages
Date of creation: May 2009
Date of revision:
Contact details of provider:
Postal: 1280 Main Street West, Hamilton, Ontario, L8S 4M4
Phone: (905) 525-9140 ext. 22765
Fax: (905) 521-8232
Web page: http://www.mcmaster.ca/economics/
More information through EDIRC
Pharmaceuticals; R&D; patents; prizes; innovation;
Find related papers by JEL classification:
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-INO-2009-05-23 (Innovation)
- NEP-IPR-2009-05-23 (Intellectual Property Rights)
- NEP-KNM-2009-05-23 (Knowledge Management & Knowledge Economy)
- NEP-MIC-2009-05-23 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Kremer, 2002. "Pharmaceuticals and the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 67-90, Fall.
- Michael Kremer, 1998. "Patent Buyouts: A Mechanism For Encouraging Innovation," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1137-1167, November.
- Rexford E. Santerre & John A. Vernon & Carmelo Giaccotto, 2006. "The Impact of Indirect Government Controls on U.S. Drug Prices and R&D," Cato Journal, Cato Journal, Cato Institute, vol. 26(1), pages 143-158, Winter.
- DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G., 2003. "The price of innovation: new estimates of drug development costs," Journal of Health Economics, Elsevier, vol. 22(2), pages 151-185, March.
- Yin, Wesley, 2008. "Market incentives and pharmaceutical innovation," Journal of Health Economics, Elsevier, vol. 27(4), pages 1060-1077, July.
- Kremer, Michael R., 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," Scholarly Articles 3693705, Harvard University Department of Economics.
- Frank R. Lichtenberg & Joel Waldfogel, 2003. "Does Misery Love Company? Evidence from pharmaceutical markets before and after the Orphan Drug Act," NBER Working Papers 9750, National Bureau of Economic Research, Inc.
- Adam B. Jaffe & Josh Lerner, 2006.
"Innovation and its Discontents,"
in: Innovation Policy and the Economy, Volume 6, pages 27-66
National Bureau of Economic Research, Inc.
- Dean Baker, 2008. "The Benefits and Savings of Publicly-Funded Clinical Trials of Prescription Drugs," CEPR Reports and Issue Briefs 2008-09, Center for Economic and Policy Research (CEPR).
- Sonia Bhalotra & Atheendar Venkataramani, 2011.
"The Captain of the Men of Death and His Shadow: Long-Run Impacts of Early Life Pneumonia Exposure,"
CHILD Working Papers
wp20_11, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Sonia Bhalotra & Atheendar Venkataramani, 2011. "The Captain of the Men of Death and His Shadow: Long-Run Impacts of Early Life Pneumonia Exposure," The Centre for Market and Public Organisation 11/273, Department of Economics, University of Bristol, UK.
- Bhalotra, Sonia R. & Venkataramani, Atheendar, 2011. "The Captain of the Men of Death and His Shadow: Long-Run Impacts of Early Life Pneumonia Exposure," IZA Discussion Papers 6041, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.