The Accidental Innovation Policymakers

Abstract

Healthcare policymakers in the United States, particularly at the federal level, have been considering a range of proposals that would lower prices for prescription drugs. The pharmaceutical industry and many politicians have argued that these proposals would harm innovation incentives, resulting in fewer new drugs coming to market in the future. This Article identifies and explores a key problem with this argument: that it is typically deployed both accidentally and asymmetrically in nature. Specifically, this Article considers previous changes to health laws that had the impact of increasing innovation incentives by providing large new subsidies to pharmaceutical companies - chiefly the creation of Medicare Part D and the passage of the Affordable Care Act - but where policymakers appear not to have analyzed these innovation-related aspects of the new laws. By contrasting these laws with others in which policymakers explicitly centered the innovation-related impacts of their actions, such as the Hatch-Waxman Act and the Orphan Drug Act, this Article suggests that policymakers may in some cases be making innovation policy “by accident,” without knowledge of their likely results. These innovation arguments are also deployed asymmetrically by interested stakeholders, creating the potential for unbalanced policymaking over time. This Article further analyzes the implications of this accidental, asymmetric policymaking for innovation law and policy.

Keywords: Health Law, food and drug law, patent law, innovation policy