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Special Interest Politics And Intellectual Property Rights: An Economic Analysis Of Strengthening Patent Protection In The Pharmaceutical Industry

  • ANGUS C. CHU

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. Copyright 2008 The Author. Journal compilation 2008 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal Economics & Politics.

Volume (Year): 20 (2008)
Issue (Month): 2 (06)
Pages: 185-215

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Handle: RePEc:bla:ecopol:v:20:y:2008:i:2:p:185-215
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