What’s the length of a patent? 20 years. What’s the social contract behind patents ? Society gives you a time-limited monopoly to incentivise you to invest in R&D and intangibles and enable you to profit at higher levels due to lack of competition.
Drug development takes 8 to 12 years on average, so the average commercial life of a drug based on its first composition of matter patent should run approx 10 years.
Noticeable how many best selling drugs have 20+ years protection. Oft involving long litigation.
One way the pharma industry erodes the social contract is by NOT meaningful innovation and by extending monopolies beyond expectations.
One way it can strengthen trust is by developing life saving medicines and ensuring access.
It’s an active debate what creates more long-term value for shareholders and society.
I’ve written about the history of patents and patent philosophy here.
If you'd like to feel inspired by commencement addresses and life lessons try: Neil Gaiman on making wonderful, fabulous, brilliant mistakes; or Nassim Taleb's commencement address; or JK Rowling on the benefits of failure. Or Charlie Munger on always inverting; Sheryl Sandberg on grief, resilience and gratitude or investor Ray Dalio on Principles.
Cross fertilise. Read about the autistic mind here.
More thoughts: My Financial Times opinion article on the importance of long-term questions to management teams and Environment, Social and Governance capital.