Big Pharma and Monopoly Capitalism: A Long-Term View

36 Pages Posted: 25 Apr 2022

See all articles by Luigi Marengo

Luigi Marengo

affiliation not provided to SSRN

Giovanni Dosi

affiliation not provided to SSRN

Jacopo Staccioli

affiliation not provided to SSRN

Maria Enrica Virgillito

affiliation not provided to SSRN

Abstract

Are IPRs institutions meant to foster innovative activities or conversely to secure appropriation and profitability? Taking stock of a long-term empirical evidence on the pharmaceutical sector in the US, we can hardly support IPRs intended as an innovation rewarding institution. Pharma patents have constituted legal barriers to protect intellectual monopolies rather than an incentive and a reward to innovative efforts. Patenting strategies appear to be quite aggressive in extending knowledge borders and enlarging the space protected from the possibility of infringements. This is also witnessed by the fact that patent applications are very skewed in the covered trade names and patent thickness expands over time. Conversely, the number of patents protecting new drugs approved by the FDA which draw upon government-sponsored research – as such a mark for quality – falls. Firm-level analysis on profitability confirms strong correlation, restricted to listed pharmaceutical firms, between patent portfolio and profit margins.

Keywords: Intellectual Property Rights, Patents, Pharmaceutical Industry

Suggested Citation

Marengo, Luigi and Dosi, Giovanni and Staccioli, Jacopo and Virgillito, Maria Enrica, Big Pharma and Monopoly Capitalism: A Long-Term View. Available at SSRN: https://ssrn.com/abstract=4092494 or http://dx.doi.org/10.2139/ssrn.4092494

Luigi Marengo (Contact Author)

affiliation not provided to SSRN

Giovanni Dosi

affiliation not provided to SSRN ( email )

No Address Available

Jacopo Staccioli

affiliation not provided to SSRN ( email )

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Maria Enrica Virgillito

affiliation not provided to SSRN ( email )

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