These points are based on a report from the Fraser Institute
entitled ‘The Benefits of Incremental Innovation’.
1. The economist Robert Gordon is of the view that western
societies have reached a scientific plateau and now there will be a decline in
the usefulness of future inventions compared to past inventions. Other
academics believe that there is presently too much ‘imitative’ incremental
innovation and too little ‘breakthrough’ innovation, and the pharmaceutical sector
is pinpointed as a particular area for this concern.
2. Innovation can be classified into incremental (improving
existing products), breakthrough (providing more substantial changes to
technologies) and radical (creating drastic changes to the competitive
environment and perhaps even creating entirely new businesses).
3. There is a feeling that managers of companies are more
risk averse to innovation than shareholders would prefer.
4. In the pharmaceutical field incremental innovation does
provide benefits to patients and helps cost-cutting. Incremental innovation
will often be based on improving the ways of delivering known drugs, making
them more effective or reducing side-effects.
5. There is controversy as to whether patents that protect incremental
innovations in the field of medicine are ‘legitimate’ or whether this is simply
an attempt to extend patent protection on the drug itself (so called ‘evergreening’).
India has specific legislation designed to stop evergreening of drugs.
6. The report ultimately concludes that incremental
innovation is beneficial. However we believe that this is a very complex topic
where the discussion is ongoing.
You may also wish to see related articles 10
Observations on Different Types of Research and 10
Points About the State of the Pharma/Biotech Sector.
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