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Drug Patents and Welfare

May 31, 2006

I've pointed out before (2, 3) that the utilitarian logic behind patents—that it's needed to provide "incentives" to innovate—could also be used to justify taxpayed-funded subsidies to artists and inventors. Interestingly, the World Health Organization, in a recent report, points out the damage pharmaceutical patents pose to the poor in the developing world, and also notes that the incentive effect of IP in such countries, in these markets at least, may be limited or non-existent.

Here we have a quasi-governmental bureaucracy—which appears, not surprisingly, to advocate using government-funding to spur innovation—admitting that patents are not only not useful, but probably harmful, in the case of pharmaceuticals.

Ironically, even among those libertarian skeptics of IP, many of them claim that if a case can be made for patents, it is in the field of pharmaceuticals. Tsk Tsk.

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