June 30, 2011
The system of patent-supported research gives drug companies like Genentech enormous incentive to mislead the public and government agencies, like the FDA, about the effectiveness of their drugs. Companies can lose billions of dollars if the FDA determines that a drug is not safe or effective and removes it from the market.
Therefore economic theory predicts that companies will make misleading claims to try to prevent removal. If the government did not grant patent monopolies that allow companies to sell drugs at prices far above the free market level, this incentive would not exist.
This fact should have been noted in reporting on the FDA’s decision to stop authorizing the use of Avastian as a treatment for breast cancer.
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