4/14/2005

Judge Confirms Patent

A Federal Judge validated the patent for the drug Zyprexa on Thursday. Zyprexa is a schizophrenia drug that brought in over four million dollars in sales last year alone. The patent will make it impossible for smaller competitors to market a similar product for at least another six years. This is a great example of the United States Judicial System controlling the market. While the patent helps encourage future research, it hurts the consumers because they will probably have to pay higher prices due to the new regulations given to the drug company.

2 comments:

C-Dizzle said...

On the one hand it will keep prices higher for a longer period of time. On the other hand, the patent will protect the makers for six years. Pharmaceutical companies spend millions and billions of dollars every year to develop the drugs we use today. The least the government can do is protect the company for a couple of years to recover the costs of producing it. What really makes the cost of prescription drugs high are the restrictions put on pharmaceutical companies by the FDA.

Dr. Tufte said...

When I teach ECON 3020 one of the things we discuss is how long patents ought to be. (You may think this an odd topic for a macroeconomics class, but patents are a growth-promoting institution).

Economic logic dictates that the patent is long enough if the rate of return to the inventor over the length of the patent is equal to the rate of return to society as a whole.

The evidence suggests that the rate of return to inventors is too low, and that patents ought to be substantially lengthened.