Innovation has driven America for the last 250 years. In fact, patents were the only “right” provided for in the original Constitution. This didn’t happen without debate, but those opposed to intellectual property rights largely changed their minds after they began seeing the benefits of providing an incentive to innovators which helped drive technology forward.
Some of the first inventions that changed the trajectory of our country involved increasing the lifespan of our nation’s infrastructure. For instance, one of the earliest patents was granted for a method of preparing wood for use in bridge building that increased the lifespan of the wood and therefore the bridges that they were used in. This meant that early investment in infrastructure went further than in other countries, allowing quicker and more efficient expansion, more travel, more trade, and a faster growing economy.
But in spite of their role in helping to build America, patents have always been the target of people unable to come up with their own ideas.
It is tough seeing your competitor come up with an idea, which they are then able to exclusively profit from for the next 20 years. However, this is the incentive that drives firms to invest in research and development, which then leads to even more ideas. And after a patent expires, the whole economy benefits, because public disclosure is the price of being granted the property right.
One of the first and biggest patent fights in America was over sewing machine innovations. Sewing machines were at the center of the industrial revolution. They helped bring affordable clothing to market and literally changed the fabric of society. However, competition in the industry was fierce and innovation was moving quickly. There were more lawsuits during the sewing machines wars than at any other time in our nation’s history, including the tech wars in recent years.
Patents are still a big part of innovation. One of the most vibrant sectors currently driving invention is the pharmaceutical industry. Like infrastructure innovations, pharmaceutical innovations help our country outperform other countries increasing the quality—and even the length—of our lives.
The cost of developing a new molecule is estimated to be $2 billion, and because of the lifespan of a patent and the long regulatory process, that investment needs to be recovered in only a few years. This means that new drugs often have high prices. As in other patent areas, competitors are jealous that one company has access to an innovation, but with pharmaceuticals politicians also face pushback because of the high costs associated with new drugs. There are several ways to deal with these high prices, but Congress does not seem to be looking at these solutions.
Regulatory reform could shorten the approval process and allow drugs to reach the market earlier. If a drug had twice the time on the market under patent protection, companies could charge half the price while generating the same profits. Additionally, the government’s involvement in the healthcare sector has created more and more middlemen, like Pharmacy Benefit Managers, who make already high costs higher.
However, instead of focusing on regulations, Congress has instead often pointed to drug patents themselves as the problem. They have called for price controls, and they are currently looking at how pharmaceutical companies manage the patent process. Basically, Congress is getting in the way – like a thorny thicket. They are impeding innovation.
We need a vibrant innovation sector across the economy, but innovation in pharmaceuticals means not only economic growth, but also quality of life increases. As our nation’s forefathers understood, Congress should support innovation as the way to grow our country.
