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Alex Tabarrok on medical patents

On Wednesday, the U.S. Supreme Court heard arguments in the case Mayo Collaborative Services v. Prometheus Laboratories, Inc. on whether "the correlation between blood test results and patient health is patentable." Prometheus Laboratories argues that it should have been allowed to "patent instructions for observing changes in a patient's body to set drug dosages."

Featured on our sister blog Medical Progress Today, Alex Tabarrok, Bartley J. Madden Chair in Economics at the Mercatus Center at George Mason University and director of research for The Independent Institute, explores the problems posed by medical patents.

Tabarrok writes:

Most importantly, patents can reduce innovation and are especially likely to do so in fields where innovations build on innovations. In fields of cumulative innovation, previous patents owners become veto players who can threaten to holdup the new innovation unless they are granted a share of the proceeds. In theory, bargaining can result in an efficient outcome. In practice, it means lawsuits, delay, waste and reduced innovation.

Since a smartphone may rely on many thousands of previous patents, the smartphone industry has heretofore been considered a classic case of how too many veto players can impede innovation. But now consider human metabolism, one of the most complicated systems known to man (just a tiny fraction of that system is shown at right), and note that if Prometheus is successful in this lawsuit that any correlation in that system can be patented. This is a recipe for disaster.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.