MPT WWW
Selected research from leading health care experts whose findings have a direct bearing on public policies effecting medical progress. Research is chosen based on its quality and relevance by the Medical Progress Today editorial staff.

Selected Research

"Napsterizing" Pharmaceuticals: Access, Innovation, and Consumer Welfare
James W. Hughes, Michael J. Moore, Edward A. Snyder, NBER Working Paper No. w9229, 9-1-02

Critics of market driven drug development often deride intellectual property protections (patents) for medicines and call for increased reliance on generic medicines, which are produced when the original patent expires or through compulsory licensing. But while this model may reduce the marginal cost of current medications that are the product of past R & D investment, it decimates market incentives to produce new breakthroughs. This paper finds that although expanding consumer access to generics would yield large benefits to current consumers, those benefits would be offset by even greater costs to future patients as a result of decreased pharmaceutical innovation. In short, for every dollar in current benefit from lower drug prices, future consumers would lose three dollars of value. This study shows what many economists have long suspected: undermining patent protections for R & D intensive industries (like pharmaceuticals) reduces productivity, hampering the nation's long-term access to life-saving drugs.


Project FDA.
  
home   spotlight   commentary   research   events   news   about   contact   links   archives
Copyright Manhattan Institute for Policy Research
52 Vanderbilt Avenue
New York, NY 10017
(212) 599-7000
mpt@manhattan-institute.org