Lucy Xiaolu Wang

Cornell University

Ph.D.

Economics

Duke University

M.A.

Economics

CUFE, Beijing, China

B.A.

Economics

Some new drugs aren’t actually ‘new’ – pharmaceutical companies exploit patents and raise prices for patients, but data transparency can help protect innovation

Lucy Xiaolu Wang

2025-09-23

Pharmaceutical innovation saves lives. But not every “new” drug is truly new.

Patents are designed to reward breakthrough inventions by granting the inventors temporary monopoly rights to recoup the costs of research and development and to encourage future innovation. But firms may also exploit the system in ways that make drugs more expensive and less accessible to patients. A 2023 study found that 78% of drugs associated with new patents weren’t actually new drugs but minor modifications.

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When developing countries band together, lifesaving drugs become cheaper and easier to buy − with trade-offs

Lucy Xiaolu Wang, Nahim Bin Zahur

2025-06-17

Procuring lifesaving drugs is a daunting challenge in many low- and middle-income countries. Essential treatments are often neither available nor affordable in these nations, even decades after the drugs entered the market.

Prospective buyers from these countries face a patent thicket, where a single drug may be covered by hundreds of patents. This makes it costly and legally difficult to secure licensing rights for manufacturing.

These buyers also face a complex and often fragile supply chain. Many major pharmaceutical firms have little incentive to sell their products in unprofitable markets. Quality assurance adds another layer of complexity, with substandard and counterfeit drugs widespread in many of these countries.

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Marketing Authorization and Strategic Patenting: Evidence from Pharmaceuticals

Lucy Xiaolu Wang, Dennis Byrski

2025-07-01

Patents can incentivize innovation, but pharmaceutical firms often extend market exclusivity by patenting minor modifications to existing drugs, raising concerns about low-novelty patents that add little therapeutic value. This study examines how patenting behavior changes after marketing authorization, a regulatory milestone that makes clinical trial data public and thereby creates “prior art” that limits future patent claims. Using a novel European patent–drug dataset and event study methods, we exploit plausibly exogenous variation in the time from patent priority filing to marketing authorization. We find a significant decline in strategic patenting after authorization, particularly in secondary patents and those covering the same disease areas. In contrast, follow-on product patents and patents for new disease areas remain stable, suggesting that authorization selectively curbs low-novelty filings. Both originators and other firms respond similarly, though at different speeds. The absence of similar responses after earlier milestones indicates increased difficulty in obtaining or enforcing low-value patents as the likely mechanism. Robustness checks – including alternative difference-in-differences estimators, constant exclusivity samples, and analyses accounting for non-European market incentives, firm characteristics, and instrumental variable approaches – support our conclusions. Our findings show how regulatory data transparency can indirectly improve patent quality.

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