Stagnation in the Drug Development Process: Are Patents the Problem?

Publication Date:

Publisher: Center for Economic and Policy Research

Author(s): Dean Baker

Research Area: Health

Keywords: Prescription drugs; Research university; Clinical trial

Type: Report

Coverage: United States

Abstract:

The rate of new drug development has stagnated, in spite of large increases in both private and public sector spending on biomedical research. The flip side of slower progress is higher drug costs. The cost of developing new drugs has been rising at an average real rate of more than 7 percent since 1987. This report considers the ways in which government patent monopolies distort incentives so that pharmaceutical companies may not opt to minimize research costs. It documents some of the perverse incentives created by patent monopolies in drugs.