On the Italian Pharmaceutical Industry

There’s a study going around the libertarian blogosphere about Italy, its pharmaceutical industry, and patents. Alex Singleton, on Samizdata, mentioned it first. Kevin Carson, on the Mutualist blog, picked up on Singleton’s post.

The gist of the argument is this: Italy didn’t have pharmaceutical patents until 1978. According to standard economic thinking, this means that Italy should have produced fewer drugs. “Yet between 1961 and 1980, 9.28% of the world’s new molecular entities (NMEs) came from Italy. NMEs are the most important advances in pharmaceuticals as they represent leaps rather than just gradual progression.” Singleton, paragraph 2.

This seems pretty damning to patent theory, at first blush. But what does “new molecular entity” mean? According the FDA, a new molecular entity is “an active [molecule or ion] that has not previously been approved (either as the parent compound or as a salt, ester or derivative of the parent compound) in the United States for use in a drug product either as a single ingredient or as part of a combination.” So, is this a new drug? Hardly. A NME is just a new type of molecule. A drug, on the other hand, requires study, testing, approval, and industrial development. So, not only must the NME be discovered, it must be developed into a consumer product.

So, how many new drugs did the Italian industry bring to market without its patents regime? The study is silent – surprise, surprise – and I haven’t been able to find a study saying one way or the other through Google. I’d be interested to know.

2 thoughts on “On the Italian Pharmaceutical Industry”

  1. Perhaps, but a new molecular entity is not a new drug, whereas an incrementally modified drug is a new drug, indeed. And considering that drug side-effects are still unpredictable, a range of chemically-similar drugs addressing the same problem gives greater hope for safely treating an illness. A dear friend suffers epilepsy and can only be treated with one particular drug, because the other epilepsy drugs cause side-effects or are ineffective. Incremental modifications allow him to lead an almost completely normal life.

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