U.S. grants patent monopolies, then declares war on anti-trust behavior
Among other things, the healthcare debate has revealed to a large audience that our attempts at shaping the drug market are a cats-cradle of contradictory regulation. A short history: Academic scientists who research future drugs are well aware of the Bayh-Dole Act which, in 1980, enabled researchers to patent and profit from taxpayer-funded innovation. It was a bold attempt to encourage the movement of ideas from universities into the marketplace, where they can benefit society. Meanwhile, the same federal government, cognizant that patents are actually monopolies designed to boost drug prices, realized that this effect must be mitigated to keep healthcare costs down. In 1984, the Hatch-Waxman Act enacted regulations to encourage generic-drug manufacturers (representing the competitive threat that patents were meant to address in the first place) to contest the original patents in court. How would the government get generic manufacturers to challenge the brand-name patents? By promising the generic manufacturer a second round of protection from competition in the event it wins the dispute. Today the Federal Trade Commission releases its new report, complaining that brand-name and generic drug manufacturers have found a profitable loophole by entering into agreements to avoid fighting over patents in the first place. The proposed remedy? The FTC wants to enact new legislation, making these anticompetitive agreements (over patent monopolies) illegal.
