The International Consortium on Agricultural Biotechnology Research (ICABR)
Pests and Patents:
An Analysis of a Biotechnology Industry as a Patent-driven
Response to Pathogen Evolution
University of Cambridge,
University College London,
Biotechnology is described as the sector that addresses recurring problems of resistance, as in the pharmaceutical and agricultural industries. The sector may be conceived as the R&D layer of a three-tiered industry that makes the fundamental determination regarding the allocation of biological resources between stabilisation and production objectives, in the manner defined by Weitzman (2000). Here we examine the capacity for decentralised patent-based incentive mechanisms to result
in socially optimal outcomes in the biotechnology industry. We demonstrate that there is a fundamental incompatibility between the dynamics of the patent system and the resistance problem. The patent-based incentive mechanisms are incapable of sustaining society against a background of increasing resistance problems. In addition, the externalities within a patent-based system indicate that decentralised mechanisms will result in systematic under-investment in the stabilisation objective.