Are drug patents worth it?

ONE OF THE first rules of American politics is not to pick a fight with Big Pharma. Its army of lobbyists in Washington, DC, has ensured that presidents from both parties, from Ronald Reagan to Barack Obama, have upheld the industry’s stout defence of intellectual-property (IP) rights, including in international treaties. Donald Trump threatened to impose drug price controls, which won bipartisan support in Congress, but intense lobbying ensured that his initiative flopped. That effort to rein in Big Pharma chimed with the industry’s global image as arrogant and greedy.

President Joe Biden is throwing his weight behind a proposal at the World Trade Organisation to waive patent protections for covid-19 vaccines. If Mr Biden is willing to rethink IP rights for covid vaccines abroad, he might also have the audacity to take on patent protection for new drugs at home. To judge whether America’s industry deserves such treatment, it is worth asking three questions. First, how much innovation is happening? Second, is rent-seeking behaviour—ranging from price gouging to patent manipulation—declining? Third, what might happen if patent rules were watered down?