Abstract

"Pills, profits and the rise of patents: The case of the pharmaceutical industry in West Germany since the 1950s"

Robert Bernsee, University of Göttingen (robert.bernsee@wiwi.uni-goettingen.de)

The COVID-19 pandemic highlighted the critical role of patents in the pharmaceutical industry for societal issues. The rapid development of mRNA-vaccines was encouraged by patent systems that played a central role in promoting research and innovation. Patents secure high revenues that are necessary to cover the expenses in researching and developing pharmaceuticals. However, patent barriers also posed challenges for the global distribution of pharmaceuticals, especially in poorer countries. This circumstance underscores that patent systems need to be balanced to ensure life-saving medications while still providing incentives for the pharmaceutical industry.

The paper addresses this topic and deals with the relevance of patents and R&D in the pharmaceutical industry after 1945. More specifically, it shows how patent rights gained in importance for the businesses of pharmaceutical companies in West Germany since the 1950s. The study relies on four major companies (Bayer, Hoechst, Merck and Schering) and draws on data from both annual reports and the databases of the European Patent Office. It also analyses sources from the business archives of the previously mentioned companies. In general, I will show that, since the 1970s, intellectual property had become more valuable than tangible assets. Surprisingly, this finding can primarily be explained by stronger regulations of the pharmaceutical industry.

In doing so, the paper contributes to the ongoing research on the impact of intellectual property in business history. This research has gained traction during recent years, but still needs further attention. The most thriving industries of the last fifty years, be it the technology, luxury or health sector, highly depend on intangible assets such as trademarks, patents, or copyrights. Thus, the study provides insights into the economic dynamics in the past decades and widens our view on the rise of intangible assets.