Accelerated Generic Entry Results in Reduction in Pharmaceutical Innovation
A study released earlier this month by researchers at the University of Chicago, Bates College, and the University of Virginia finds that accelerating generics to the market harms consumers by reducing innovation leading to new prescription drugs.[1]
Government patents granted under statutory standards make it possible for pharmaceutical companies to invest the $800 million needed on average to bring a drug to market. Without patents, companies that don’t make the R&D investment needed to invent new medicines could immediately copy the drug and undercut the innovator’s price, making it impossible for the innovator to generate funds to invest in discovering new medicines. Even with patents, 7 of 10 brand-name drugs brought to market never recoup their research investment.
For more information on how pharmaceutical innovation is saving lives, please visit www.newmedicines.org.
[1] J. Hughes, M. Moore, and E. Snyder, “’Napsterizing’ Pharmaceuticals: Access, Innovation, and Consumer Welfare,” National Bureau of Economic Research Working Paper #9229 (Cambridge, MA: NBER, October 2002) available at www.nber.org/papers/w9229.
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