Edward A. Snyder, Dean and Professor of Economics at the University of Chicago Graduate School of Business, testified at a joint hearing conducted by the Federal Trade Commission and the Antitrust Division of the Department of Justice in Washington, D.C., yesterday concerning the impact of competition, patent law and intellectual property policy on innovation and other aspects of consumer welfare.
"Napsterization' of the pharmaceutical industry—removing patents and providing consumers full access to the stock of drugs now available—as well as other policies that would weaken patent protection would on net harm consumers," Snyder said. "For every dollar in consumer benefit realized from greater access, other consumers would be harmed at a rate of three dollars from reduced innovation," he said.
Snyder also cited findings from other research now underway at the University of Chicago Graduate School of Business by Robert Topel and Kevin Murphy who found that over the last half-century, improvements in health have been as valuable as all other sources of economic growth combined.
Snyder said there is a risk that actual and potential consumers of prescription drugs currently on the market will have a greater voice than unidentified potential consumers of drugs not yet on the market.
Last week, Snyder and Gary Becker, 1992 winner of the Nobel Prize in Economics, finished teaching a course for University of Chicago MBA students on the economic analysis of major policy issues. Kevin Murphy, winner of the John Bates Clark Medal from the American Economic Association, also taught the course which developed frameworks for public policy analysis and looked at current policy proposals. Snyder was responsible for sections of the course dealing with antitrust policy and the pharmaceutical industry.
Snyder's testimony drew directly from a research paper titled "Napsterizing Pharmaceuticals and Consumer Welfare," co-authored with James W. Hughes, chairman of the economics department at Bates College and Michael J. Moore of the University of Virginia's Darden School. Hughes and Moore are experts in public policy and regulation.
The University of Chicago Graduate School of Business is one of the oldest and largest business schools in the world. It offers full-time and part-time MBA programs, a PhD program, and open enrollment executive education.