My former professor, Richard Epstein, has a new working paper with co-author Bruce Kuhlik arguing that the Hatch-Waxman Act represents a “sound compromise” that should not be undercut by pro-generic legislative efforts.
Strong property right protection — as opposed to the compulsory licensing schemes advocated by others . . . should remain the dominant approach in patent law.
We think that Heller and Eisenberg have overstated the case against patent protection at both the theoretical and empirical level. . . . We see no reason to believe that the sole or dominant purpose for [obtaining a patent] is to block innovations by others. Patents themselves are expensive to acquire. The inventor only makes income to the extent that it can assign, license or sell the patent in question.
Epstein & Kuhlik specifically address S.812 (Greater Access to Affordable Pharmaceuticals Act) passed by the Senate in 2002. (Reintroduced here). They argue that the Act’s anti-price-discrimination terms would push the price of patented drugs down to a generic pricing level — effectively repealing the patent.
And, without ample patent protection, no combination of first mover advantages or altruism will generate the capital sums needed [to fund the high cost of pharmaceutical research].
(Thanks to Professor Sampat for the link).
Although not a direct rebuttal, Colman Ragan argues in the most recent Federal Circuit Bar Journal that procedural amendments to Hatch-Waxman will help lower drug prices.