Patent protection spurs innovation by raising the rewards for research, but it usually results in less desirable allocations after the innovation has been discovered. In effect, patents reward inventors with inefficient monopoly power. However, previous analysis of intellectual property has...

Intellectual property rights are viewed as essential to medical innovation, but very often involve social costs due to patent monopolies and other inefficiencies. We review the positive theory of innovation in health care, as it relates to the determination of innovation demand and supply. The...