Drugged Out: How Cognitive Bias Hurts Drug Innovation

90 Pages Posted: 1 Sep 2013 Last revised: 9 Aug 2014

Cynthia M. Ho

Loyola University of Chicago School of Law

Date Written: August 31, 2013

Abstract

In recent years, legal scholars have begun to identify and evaluate how the cognitive biases held by all individuals impact law and policy. Thus far, however, scholars have not recognized the existence or impact of biases that impact pharmaceutical innovation and patent policy. This Article fills that gap at a key juncture. Currently, the industry mostly produces drugs that do not provide significant clinical benefits over existing drugs. Further, even the number of new drugs produced every year is modest compared with exponentially increasing pharmaceutical expenditures.

This Article shows that there are significant cognitive biases that play a key, but thus far unrecognized, role in promoting modest innovation. In particular, there are views of pharmaceutical innovation and patent policy that have been broadly accepted amongst not only the industry, but by policy makers and some scholars that are not soundly supported. These views, referred to as “schemas,” are perpetuated because of well-established cognitive biases explained in the Article. Recognizing these schemas is critical because scholars and policy makers are vulnerable to accept these mistaken assumptions as fact, and create and recommend misguided policies. Although these schemas revealed here are broadly consistent with cognitive science studies, this is the first Article to not only document schemas in the realm of pharmaceutical innovation, but also show how they are perpetuated despite contrary evidence. After revealing these schemas, this Article proposes concrete steps to counteract them, including possible steps to modify patent policy in light of this new understanding.

Keywords: patent, drug, pharmaceutical, innovation, cognitive bias, schema, drug development

JEL Classification: I10, I18, I19, K11, K19, K23, K32, K39, L50, L52, L59, L65, O31, O32, O34, O38

Suggested Citation

Ho, Cynthia M., Drugged Out: How Cognitive Bias Hurts Drug Innovation (August 31, 2013). 51 San Diego Law Review 419 (2014). Available at SSRN: https://ssrn.com/abstract=2318820 or http://dx.doi.org/10.2139/ssrn.2318820

Cynthia M. Ho (Contact Author)

Loyola University of Chicago School of Law ( email )

25 E. Pearson
Chicago, IL 60611
United States

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