How strong should patents be? Patent strength Downside of stronger patents Customers have to pay monopoly prices for a longer period Less incentive for further innovation by same company Legal barriers to subsequent innovation by another company But if patents are too weak,no incentive to develop new drugs! Bhattacharya,Hyde and Tu-HealthEconomics Bhattacharya, Hyde and Tu – Health Economics How strong should patents be?  Downside of stronger patents  Customers have to pay monopoly prices for a longer period  Less incentive for further innovation by same company  Legal barriers to subsequent innovation by another company  But if patents are too weak, no incentive to develop new drugs!