How Patents Harm Biotech Innovation

The belief that Europe was without medical and chemical patents is something of a misnomer. When a company developed a new drug/chemical the process was patentable. A rival could only produce a "clone" product if they could develop a new process of manufacture...hardly a simple exercise. The Germans had process patents BEFORE the 20th century, while the Swiss got process patents in 1907. This also explains the innovation and creativity demonstrated in these countries (often in developing new processes!). It should also be noted that although companies in these countries were not permitted patents for specific chemical substances, they were not prevented from registering patents (and earning monopoly revenues) in countries where such patents were permitted. As for Italy, they were a major producer and exporter until 1978, when they they were no longer permitted to "pirate" drugs developed elsewhere - after that, as you say, they were "decimated" - this seems logical - I would not expect an industry focused on producing generics to be competitive at developing new commercially viable products. In their defense, Italy at this time (end of the 1970's and early 1980's) faced a variety of general problems (stagflation, civil unrest, oil crisis, etc), which may also have contributed to the collapse of the industry.