power to create a monopoly. Patents restrict the output of the pharmaceutical industry by allowing monopoly pricing to happen, but may also increase output by improving incentives for marketing. “According to standard analysis, the research and development benefits of a patent system must be weighed against the associated output lost to patent monopolies, which reduce price competition” (Lakdawalla, 2012, page 2). This means that theoretically when a patent expires, competition will always increase and therefore lead to lower prices and higher output in the market. However, in a study done by Darius Lakdawalla and Tomas Philipson for the Journal of Law and Economics, a sample of U.S. pharmaceutical products whose patents expired between 1992 and 2002, the opposite happened. Output fell after the patent expired for about 40 percent of the pharmaceutical drugs. Typically, when patents are discussed, the price of the product is the only thing looked at by people. While monopolies have incentives to restrict quantity through high prices, they may also have incentives to increase promotion of their product through advertising. This summer Mylan Pharmaceuticals bought $1.7 million worth of airtime during NBC’s coverage of the Olympic Games (Tedeschi, August 24 2016, STAT). Throughout the games there were 46 ads, though they did not mention EpiPen directly, they did direct consumers to an allergy awareness website (faceyourrisk.com) that has numerous links to the EpiPen site. As stated by Lakdawalla and Philipson, “Advertising by a monopolist is valuable because it moves output toward its efficient level. This is true even if advertising is purely persuasive and provides no valuable information to consumers.” (Lakdawalla, 2012, page 153). To test their hypothesis, Lakdawalla and Philison estimated the impact of marketing on welfare using patent expirations in the U.S. pharmaceutical market between 1990 and 2003. They felt this would...