The Role of Patents in Corrupting the Drug Development Process

The NYT discusses the Food and Drug Administration's drug approval process which often allows drugs on the market before there is direct evidence of their effectiveness. It would have been worth noting how government patent monopolies distort this process. Drug companies are anxious to gain patent rents and therefore will aggressively lobby the FDA to approve their drug, whether or not their has been sufficient testing. By contrast, in cases where there are already a number of drugs to treat a specific health condition, like those discussed in this article, it would be socially beneficial to require long and extensive testing, since there is little reason to believe that a new drug will offer substantial addition benefits. The article quotes an industry representative as complaining that such a requirement would be expensive and discourage the development of new drugs. Of course that is precisely the desired outcome. We would rather see drug companies pursue cures for health conditions where current treatments are inadequate than try to develop copycat drugs. This point should have been discussed explicitly in the article.

--Dean Baker