Pharmaceutical Shills and Think Tank Corruption: Sally Pipes’s The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy―and How to Keep It

by Stephan Kinsella on August 20, 2025

Intellectual Property and Think Tank Corruption

I’ve pointed out before how too many allegedly free market groups are pro-patent (and pro-IP in general).¹ And many were pro-vaccine and pro-lockdowns,² and of course many are not only pro-pharmaceuticals but outright shills for Big Pharma. Their support for patents is one reason many supposed free market advocates even oppose free trade in drugs and drug reimportation:³ it would undercut the monopoly prices Big Pharma is able to charge US consumers of drugs—the price is inflated not only because of unnecessary, artificial FDA costs, and because of US pharmaceutical patents, but also because FDA regulation and import controls restrict the importation of cheaper but identical drugs sold abroad for lower prices (due to local price controls or price discrimination).⁴ The Federalist Society,⁵ Cato, Independent Institute, and others, are all disappointing on IP. Independent Institute senior fellow William Shughart, for example,⁶ has embarrassingly argued:

Granting a temporary monopoly to the rare breakthrough is necessary, therefore, to provide its inventor with an opportunity to earn a return on the investment that led to the new idea—and to encourage additional such investments. Such protection is especially important in the pharmaceutical industry, where, in its absence, new drugs could be duplicated by competitors, and the incentive to invest would disappear, stifling the discovery process.

To paraphrase the late economist Joan Robinson, patents and copyrights slow down the diffusion of new ideas for a reason: to ensure there will be more new ideas to diffuse. (( Independent Institute on The “Benefits” of Intellectual Property Protection; Shughart’s Defense of IP. ))

The Institute’s journal, Independent Review, has published pro-IP articles, e.g., Arthur M. Diamond Jr., “Seeking the Patent Truth: Patents Can Provide Justice and Funding for Inventors“ (Winter 2015) and John R. Graham, “The Benefits of Intellectual Property Protection,” (Feb. 15, 2016). Graham writes:

If there is one thing about which libertarians are never likely to agree, it is whether intellectual property—patents, copyrights, trademarks, and trade secrets—should receive the same legal protection as physical property.

He’s right about that, but still supports IP, sadly.⁷ Even anti-IP pioneer Tom Palmer of Cato⁸ later softened his opposition to patents.⁹ and I was invited, then disinvited, to a Cato IP panel a few years ago.¹⁰ Cato also supported the abominable IP-imperialist TPP.¹¹

Other so-called free market groups have also been bad on IP, such as the Austrian Economics Center, Vienna; F.A. v. Hayek Institute, Austria; Hayek Institute Romania; Ayn Rand Institute Europe (unsurprisingly); Libertarian Club Libek, Serbia; Liberty Forum of Greece; Italian Stupids for Individual Liberty (sorry, typo—I mean Students);¹² the Liberty Institute, India; and Digital Liberty, USA.¹³ The tech-libertarian groups, like EFF, fulminate against “junk” patents and patent trolls but do not oppose IP itself. Even the tech-libertarian defenders of poor Aaron Swartz, driven to suicide by the threat of draconian copyright criminal penalties, shamefully, disgustingly admitted that he of course needed “some punishment.” And of course all the Objectivist groups are rabidly for IP (see e.g. work by Adam Mossoff).¹⁴

Even the Libertarian Party was bad on IP¹⁵ until I and the Mises Caucus got involved.¹⁶ Who knows what will happen in a the future LP; ah well, even if it crawfishes on IP, as Rothbard might say, “at least the world [LP] will have had a glorious holiday.”¹⁷

In any case, there is truly an unholy alliance between patents, the state, and Big Pharma.¹⁸ We should of course decouple trade and IP and favor free trade!¹⁹

But should we be surprised? Perhaps one reason some of these people and think tanks shill for IP is Big Pharma donors.¹ According to SourceWatch, Cato’s donors include pharmaceutical companies Eli Lilly & Company, Merck & Company and Pfizer, Inc. (( Note that SourceWatch does not provide a source for this claim, and none of these companies are listed in Cato’s Annual Report 2005; see also Cato Annual Report 2014]. )) It’s no surprise Big Pharma in effect bribes free market groups to promote patent law and to oppose drug reimportation (aka free trade)²⁰ and Medicare having the power to bargain for low prices.²¹ There’s lots of money in it. Big Pharma will do all they can to keep fleecing the US consumers-patients-taxpayers as long as they can.

And in addition to the groups above, now Civitas, allegedly free market Pacific Research Institute, and even AIER seem to be pro-IP.

The latest round of patent shilling includes the work of one Sally Pipes (@sallypipes), the Pacific Research Institute’s president, CEO and Thomas W. Smith Fellow in Health Care policy. She’s out shilling for pharmaceuticals and patent and opposing free trade, no doubt to the delight of Big Pharma, such as her recent book The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy―and How to Keep It (Encounter 2025). She opposes caps on drug prices and of course favors patents. See, for example, her articles “This Bipartisan Bill Would Upend America’s Pharmaceutical Industry,” Forbes (Aug. 19, 2024) and “The Trump Administration Is Reviving Its Worst Drug Pricing Policies,” Forbes (Aug 18, 2025), and recent tweets shilling for pharma. Here she is shilling for pharma patents and opposing Medicare negotiation for lower prices:

There’s no doubt price controls chill competition. But the next trap is the myth of “anticompetitive” patents. America’s patent system fuels generics and biosimilars by rewarding innovation and incentivizing competition. Undermining that balance hurts everyone. https://t.co/6z8ZQaQLTj

— Sally Pipes (@sallypipes) July 17, 2025

Her pro-patent and pro-Big Pharma work is then touted by the Independent Institute (no surprise; see references above to Shughart’s work), such as this positive review David G. Anderson review, The World’s Medicine Chest How America Achieved Pharmaceutical Supremacy—and How to Keep It By Sally C. Pipes, The Independent Review (Summer 2025). He echoes Pipes’ support of patents and the extension of patent terms due to FDA delays:

Pipes attributes this shift to divergent national policies—more and more stringent price controls and regulation by taxpayer-funded national health systems in European countries vs. more development-friendly, free-market policies in the U.S. She highlights several legislative initiatives responsible for this in the U.S., including:

The Bayh-Dole Act of 1980, which privatized ownership of NIH-funded inventions [i.e. patents. —SK];
The Hatch-Waxman Act of 1984, which allowed the FDA to provide 5–12 years of “regulatory exclusivity” after drugs come to market [I.e., extending the patent monopoly or adding a similar one onto it. —SK]; and

… Pipes is probably correct that price controls helped propel the rapid migration of drug development from Europe to the U.S., although other factors undoubtedly played a role, including: …

Liberal patent protection and regulatory exclusivity laws in the US. While FDA commercialization timelines are already generous compared with Europe, drug companies also use “patent thickets” (multiple product and process patents) to extend their monopoly pricing periods here.

Oh well. At least he admits patents are monopoly privilege grants by the state, not free market property rights.²² And he does seem to think Pipes ignores some problems:

While “pharmaceutical supremacy” (Pipes’ term) may contribute to the U.S. economy and increase Americans’ access to prescription drugs, it has drawbacks that she largely ignores. One is overprescribing drugs that create or exacerbate medical problems. The opioid epidemic is the clearest example, but other drugs like Adderall and Ritalin are also overused. A recent Wall Street Journal article described negative long-term effects of taking benzodiazepines like Xanax and Valium (Shalini Ramachandran and Betsy McKay, “The Dark Side of America’s Xanax Habit,” Wall Street Journal, March 13, 2025).

Another major drawback is higher cost of care for U.S. consumers. DTC advertising biases consumers toward branded drugs rather than cheaper generics and biosimilars. The complex prescribing and distribution system for drugs, involving manufacturers, payers, pharmacy benefit managers (PBMs), and pharmacies, obscures drug prices and contributes to higher costs. And, of course, the private market permits drug companies with patent protection to charge insurers whatever the market will bear during their monopolies, reducing consumer surplus.

So he concedes patents are monopolies, and that it’s good they are granted, and that it’s good their terms are extended. Yet, the monopoly prices they engender reduce consumer surplus and are drawbacks leading to higher costs? Which one is it, kemosabe?

Then we have another review of Pipes’s book by Jonathan Miltimore, a senior editor at AIER (@JonMiltimore; @civitas4health), “How America Became the World’s Medicine Chest—and Why That Status Is at Risk,” Civitas Institute (University of Texas at Austin) (Jul 29, 2025). Now AIER is pro-IP; sad, given that the heroically anti-IP Jeffrey Tucker used to be there.²³ (A brief background: When Tucker was at AIER, he orchestrated the Great Barrington Declaration, which many saw as anti-vax. It was opposed by the CDC and NIH and its supporters. Then, there was a management upheaval at AIER and Tucker founded the heroic Brownstone Insitute. Then AIER hired Miltimore and it’s now promoting Big Pharma, vaccines, patents… You connect the dots.)

Miltimore’s review led Tucker to comment:

It’s genuinely heart breaking to see “free market” organizations turning over their editorial pages to shill for the worst features of big pharma. How that came to be surely involves money but it also reveals extraordinary intellectual shabbiness.

In response, Miltimore highlighted portions of his review critical of Pipes’s failure to criticize the public-private partnership, and he does criticize her support of covid vaccination mandates.

In any case, he does not critize Pipes’s support of pharmaceutical patents. He writes, for example:

Pipes, the president of the free market Pacific Research Institute, spends the first few chapters of her book showing how European countries fumbled away their dominance through bad policies, particularly a fondness for price controls.

Price controls have been failing for thousands of years, and Pipes shows in painstaking detail how these policies destroyed the incentive structure necessary for drug innovation.

To be fair to Europeans, their decision to resort to price controls didn’t happen in a vacuum. They were largely the byproduct—a “natural consequence,” in Pipes’ words—of a different government scheme: universal healthcare.

But European capping of pharma prices inflated by the patents the EU countries grant pharma companies is hardly a price control! It’s only a “price control” if you view the prices otherwise charged as “free market” prices in the first place—but they are not; the prices pharmaceutical companies charge when they have state-granted patents are monopoly prices far above the free market price. That is the whole point of the patent system: to allow “innovators” to more easily “recoup their costs” of development by using the patent to outlaw competition so that they can charge above-market prices!²⁴ When the state refuses to pay this exaggerated, monopoly price, or “caps” it to a lower level, this is not a price control because there is no reason to believe the “capped” or negotiated prices are lower than the free market price; they are just lower than the price the state’s patent grant would permit the monopolist to charge. (Incidentally, states that grant patents have always imposed limits on the power of patent holders to charge prices that are “too high”—by means of a threat of a compulsory license or antitrust action.) ²⁵ As I wrote previously,

it’s not a price control if Canada puts limits on how much a pharma company can use the Canadian-granted patent to extort buyers. It just means that the price charged in Canada—still a monopoly, above-market price—is not as high as it could be.²⁶

Miltimore summarize Pipes’s argument thusly:

The United States chartered a different path, and Pipes takes readers through a brief history that includes the passage of the Bayh-Dole Act (1980) and the Hatch-Waxman Act (1984), legislation that helped turn publicly funded research into commercial breakthroughs and created a thriving market for generic drugs.

While “obscene” pharmaceutical profits dominate today’s headlines, Pipes points out that 90 percent of all US prescriptions are for generic drugs, the highest percentage in the world. Meanwhile, strong patent protection and flexible pricing have fueled innovation, leading to a steady pipeline of new treatments and medical breakthroughs.

There is no indication that Miltimore disagrees with this view. No criticism of her support for Bayh-Dole and Hatch-Waxman, or of her pro-patent comments. Yet he does criticize her defense of the private-public paradigm, since it has polluted science and also led to “coercive vaccination mandates,” but not because it led to patents on publicly funded research.