Elections Center on Prescription Drug Prices: Are Candidates Talking 'Cents' or 'Non-Cents'? 11/4/2002
From: Misty Woodruff of the Institute for Policy Innovation, 972-874-5139 or E-mail: misty@ipi.org Web site: http://www.ipi.org DALLAS, Nov. 4 -- This election season candidates from all ideological perspectives are campaigning to provide relief from high drug prices by tearing down so-called "drug monopolies" and imposing price restrictions. But will their proposals actually work and will they cause more harm than good? Writing in a recent report for the Institute for Policy Innovation, Richard Epstein, professor of law at the University of Chicago and Senior Fellow at the Hoover Institute, argues that patents provide drug companies with an economic incentive to create new drugs that relieve suffering and save lives. "The phrase 'patent monopoly' is something of a misnomer," says Epstein. "In reality, patents actually encourage economic competition. "Since no drug patent protects its holder against the sale of a different patented drug approved for the same medical condition, it's feasible that the dual presence of similar drugs restrains prices for both products. If you remove the patent monopoly, the rate of new invention will taper, with the result that everyone would enjoy the hollow right to buy products that have not been created," said Epstein Drug company patents face numerous obstacles, costs and risks in bringing a new drug to market. The U.S. Constitution recognizes these challenges and provides for intellectual property protections. It would be easy to give too much patent protection. For example, a patent could last for 100 years. But U.S. patent law has so far avoided these pitfalls by limiting patents to 20 years and by awarding them only for "nonobvious" advances over the prior art. In addition, the patentee must disclose to the world the best mode for making the invention, and thereby plant the seeds for its own destruction. Continues Epstein: "Legislators may want to impose reckless price restrictions on future research, but, if they do, then they will have to explain to the American public why the next generation of wonder drugs was never invented." ------ Additional information on this report may be found by visiting http://www.ipi.org or by contacting Misty Woodruff. The author is available for interview. |