Home > Uncategorized > The incentive for pushing opioids: patent monopolies

The incentive for pushing opioids: patent monopolies

from Dean Baker

It’s probably too simple and obvious to be worth mentioning, but it seems none of the news coverage on the suits against opioid manufacturers say that the reason that companies like Purdue Pharma and Johnson & Johnson had so much incentive to push their drugs was that the government gave them patent monopolies that allowed them to sell their products for prices that were far above the free market level. While generic manufacturers also made money on opioids, the largest profits were made the brand manufacturers, who also did the most pushing.

One of the unintended consequences of government granted patent monopolies is that it gives companies incentive to mislead physicians and the general public about the safety and effectiveness of their drugs. The costs from the resulting improper care can be enormous, as we showed in a short paper five years ago.

This should be a strong argument for alternatives to patent financed research, such as the $40 billion in direct public funding that now goes through the National Institutes of Health. Unfortunately, the idea of alternatives to patent-financed pharmaceutical research, which would allow all new drugs to sell at generic prices, saving close to $400 billion annually (1.8 percent of GDP), is too radical for U.S. politicians.

  1. September 1, 2019 at 8:15 pm

    Thank you, Dr. Baker, for beginning to address the patent issue, which is also being challenged by China’s technological innovation model. The free market successes of this model — whether we like it or not — may be demonstrating a new pragmatic era showing which property rights can be secured and which cannot. I’m not expressing an ethical or moral judgment, only a market observation.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.