• patents
• knowledge economy
• innovation policy
• biopharmaceutical industry
• public policy

This work aims at shedding some light on public and private roles in biopharmaceutical innovation. After reviewing the pillars of neoclassical and evolutionary theories of technical change, we analyse current innovation policy devices; among them, we focus on the patent system. As suggested by historical and empirical literature, the effectiveness of patents in spurring innovation is all but uncontroversial. Real-world technical change, in fact, results from the interaction of heterogeneous actors belonging to complex “innovation systems”. In this context, typical of the biopharmaceutical industry, the role of the government is likely to be decisive and invisible at the same time, hidden by a tight network of licensing and technological transfer agreements. In order to unveil the public hand, we propose a patent analysis aimed at identifying the value and the characteristics of public and private biopharmaceutical innovation. The analysis is conducted over two datasets: the first one collects patents from the USPTO Cross-Related Art References 514.810-935 granted between 1976 and 2006; the second one was built by Sampat and Lichtenberg (2011) and includes all patents associated to New Molecular Entities (NMEs) approved by the Food and Drug Administration (FDA) from 1988 to 2005. We find that public and academic patents result in greater knowledge externalities as measured by forward patent citations. Furthermore, public and academic patents are on average more original and more general than their private counterparts. However, these results hold only for the first dataset, suggesting that a better-rounded vision of biopharmaceutical innovation dynamics may be achieved only through a microscopic approach, investigating the characteristics of public and private R&D over different therapeutic areas and at different levels of the innovation chain.