This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
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.
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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.
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