People Respond to Incentives: Another Case of Patents Leading to Bad Medicine

June 18, 2013

The NYT reported on the findings of two independent studies that a spinal treatment procedure provided by the medical device maker Medtronic was no more effective than prior treatments and was possibly harmful. The studies implied that earlier studies by Medtronic were biased in exaggerating the potential benefits from the procedure, which has netted the company billions of dollars in revenue over the last decade.

This is exactly the sort of corruption that economic theory predicts would result from government granted patent monopolies. This leads to both large amounts of excess costs and often bad health outcomes.

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