LSE Public Lectures and Events

Episode: Technology for the Public Interest: Preventing Capture and Promoting Welfare
Date: October 20, 2025
Speakers: Prof. Padmashree Gehl Sampath, Prof. Ken Shadlen (host), Dr. Laura Mann (discussant)
Podcast Host: London School of Economics and Political Science

Episode Overview

This lecture explores the dynamics of "winner takes all" markets in technology sectors, focusing specifically on pharmaceuticals and artificial intelligence (AI). Prof. Padmashree Gehl Sampath provides a comparative analysis of these industries, examining how market structures, regulatory environments, and innovation models converge to enable dominance and sometimes stifle broader welfare. Through detailed case studies and policy discussion, the episode scrutinizes the public-private balance in R&D, regulatory capture, the implications for global development, and strategies to promote public interest and welfare.

Key Discussion Points and Insights

1. Understanding "Winner Takes All" Markets

[03:30–08:00]

Definition: Markets where top performers disproportionately gain market share and rewards, leaving most competitors with little, regardless of similar efforts.
Key features:
- Network effects: Value grows with more users, creating compounding advantages.
- Economies of scale: High fixed, low marginal costs create barriers to entry.
- First-mover advantage: Early entrants can lock-in market leadership.

Quote:

"A winner takes all market is where best performers disproportionately capture large rewards and market share and leave the competitors with minimal returns despite similar efforts."
— Padmashree Gehl Sampath [04:00]

2. Market Structures in AI vs. Pharmaceuticals

[08:00–13:30]

AI:
- Dominance driven by data, hardware/software ecosystems, and investment in scalable approaches.
- Firms like Nvidia exemplify the compounding cycle: more AI developers drive hardware demand, leading to more R&D and sustained advantage.
- Oligopolistic with cloud giants, model leaders, and hardware providers locking in users.
Pharmaceuticals:
- No strong network effects; drugs don’t become more effective with more users.
- Barriers to entry arise from regulatory approval, manufacturing complexity, and patent thickets—rather than exclusively R&D or data scale.
- Dominance maintained via patent extensions (device patents, therapy patents), not just technological superiority.

Quote:

"In the pharmaceutical sector, none of these [AI-like] conditions are met… A drug doesn't become more effective the more people that use it."
— Padmashree Gehl Sampath [10:30]

3. Mechanisms of Market Dominance in Pharmaceuticals

[13:30–23:00]

Case Study 1: Insulin Oligopoly

Dominance by Novo Nordisk, Eli Lilly, and Sanofi since the late 1990s.
Tight pricing coordination, patent “evergreening” on both insulin molecules and delivery devices.
- Original patents expire ~2016, but device and use patents extend exclusivity to 2040.
- Captured 97% of global market for two decades.

Quote:

"They practically captured about 97% of the global diabetes market for about 20 years...extension of patent monopoly from 2016 to about 2040."
— Padmashree Gehl Sampath [17:20]

Case Study 2: Monoclonal Antibodies (Humira & Keytruda)

Multiple layers of patents: formulation, method of use, device, user experience.
“Patent thickets” extend exclusivity beyond base patent expiry (2016–2036).
Other drugs like Keytruda and semaglutide follow similar strategies.

Case Study 3: Public R&D vs. Private Capture

Monoclonal antibodies and CAR-T therapies: foundational public funding; private firms patent and commercialize.
COVID-19 mRNA vaccines: massive public investment (e.g., US govt., Operation Warp Speed) enabled rapid innovation; raised questions about public leverage and access.

Quote:

“What we see is privatization of public research in most cases and intellectual property going to private firms when public sector research was the main precursor of those innovations.”
— Padmashree Gehl Sampath [27:30]

4. Declining Public R&D and Regulatory Capture

[25:30–30:00]

Across US, UK, Germany, public R&D investment as a share of GDP has fallen sharply, especially since the 1990s.
This decline shifts innovation leadership and direction to private sector firms, often prioritizing incremental innovation and market defense over radical breakthroughs.
Regulatory capture compounds dominance: firms shape IP policies, access debates, and regulatory standards in their favor.

Quote:

"Pharmaceutical firms are able to capture the law... access is seen as a distributional issue, not as an issue which needs to be counted when we construct innovation and R&D models."
— Padmashree Gehl Sampath [28:30]

5. Implications for Welfare, Innovation, and Policy

[30:00–38:00]

Market structures discourage truly disruptive innovation (“vertical innovation”), incentivize incrementalism, and can create future technology “valleys of death” where foundational research is lacking.
AI Risks: LLMs and other paradigms may become locked-in, crowding out alternative AI approaches.
Need for sector-specific, nuanced regulatory strategies rather than simple “pro-” or “anti-” tech stances. One size does not fit all.

Quote:

"We really cannot think of the world in the old sense of innovative firms and generic firms... every product category is different."
— Padmashree Gehl Sampath [31:30]

6. Insights from the Discussant: Dr. Laura Mann

[38:40–46:50]

Emphasizes:
- The importance of ecosystem thinking—beyond products, firms shape and maintain market dominance via regulatory and infrastructural strategies.
- Parallels in other sectors (e.g., agriculture, compliance mechanisms).
- The relevance of geopolitical rivalry (esp. US–China) in tech infrastructure.
- Urges case-by-case approaches to regulation, not generic policy.
- Raises questions for Padmashree:
  - Implications for developing countries and African integration.
  - Balancing access and commercial interest.
  - How the public can reclaim leverage over innovation direction.
  - The complexity of data centralization, especially in the health sector.
  - Talent flow: are “winner takes all” markets siphoning top skills, especially from the Global South?

Quote:

"We have to think in a specific way about regulation, how to do industrial policy... there's a lot of specific sector things going on and we really need a kind of varieties of digital capitalism approach."
— Laura Mann [41:45]

7. Q&A with Audience and Online Participants

Selected Topics and Quotes with Timestamps:

Global Development & African Context

[47:02–50:45]

Industrialization is foundational for development; current dynamics in pharma and AI worsen health and information security deficits in low-income countries.
African mRNA hub case: When big companies refused to license, African scientists reverse-engineered technology, causing delays but fostering local capacity.

Quote:

"We need to decentralize public R&D and create nodes in the developing world on how we can create the same kind of economics effects that big firms are able to create in the West."
— Padmashree Gehl Sampath [49:54]

Ecosystem Lock-in, Regulation, and Patent Strategies

[55:11–66:24]

Access-oriented firms exist, but are constrained by a broader ecosystem and shareholder value pressures.
Regulators and patient care groups can fall into the orbit of dominant firms, leading to widespread “capture.”
Example: Shift from human insulin to analogs, and competitive device patents, making even expired molecules hard to access in developing countries.

Policy, Public Interest, and Innovation Models

[68:18–74:23]

Call for informed, industry-specific regulation, not blanket policies.
The value of conditionalities: if public funding supports innovation, access and licensing requirements should be enforced as conditions of patents.

Developing World Strategies

[74:47–77:01]

Generics-only strategies insufficient; even top Indian or Chinese generic firms struggle to marshal R&D for novel innovation.
Need to rethink state support and public investment for true pharmaceutical and tech sector development.

Barriers to Change & Global Power Asymmetries

[77:26–80:14]

Opposition arises from industry associations, entrenched national interests, and even systemic misunderstanding of sector dynamics.
US dominance in tech and pharma is hard to counteract, though increased public R&D and European legal action may provide partial counterbalances.

Breaking Up Dominant Firms & Open Innovation

[80:14–84:10]

Antitrust action technically possible but rarely pursued due to national economic considerations—countries unwilling to break up their own “champions.”
Modular and open-source pharma (e.g., Open Insulin) seen as promising for democratic innovation and decentralized outcomes, but skills and resources remain a challenge.

Notable Quotes & Memorable Moments

On "Code is Law" in Regulation:

"Code is law... once you have some kind of software code, that's the one that decides what the extent of your privacy is. We need to think about the pharmaceutical sector in similar terms."
— Padmashree Gehl Sampath [32:40]
On Directed Technological Change:

"In winner takes all markets, it's actually the firm that sets the direction of the technological change. It's not society, it's not policymakers, it's not consumers."
— Padmashree Gehl Sampath [34:00]
On Public vs. Private Innovation Models:

"The model of innovation is very important. Private firms have a particular value... the question we need to pose ourselves is how do we make sure we create the right environment for private firms to uptake public discoveries and to create products, but in a competitive environment?"
— Padmashree Gehl Sampath [68:18]

Conclusion

The episode delivers a sophisticated analysis of how technological and market design choices shape public welfare, innovation, and industrial policy. It underscores the importance of public investment, robust regulation, and a nuanced, sector-by-sector approach. Both the discussion and extensive Q&A emphasize the pressing need for strategies that democratize innovation, promote global welfare, and prevent regulatory and market capture, particularly for developing countries.

Timestamps for Key Segments

| Segment | Timestamp | |--------------------------------------------------------------------------------------------------|--------------| | Introduction and framing by Ken Shadlen | 00:16–03:28 | | Main presentation: Winner takes all markets; AI vs. Pharma overview | 03:28–13:30 | | Case studies: Insulin, monoclonal antibodies, and mRNA vaccines | 13:30–27:00 | | Public/private R&D investment and regulatory capture | 27:00–30:00 | | Implications for welfare, need for nuanced regulation | 30:00–38:00 | | Laura Mann's discussant remarks and questions | 38:41–46:51 | | Audience and online questions with in-depth policy and development discussion | 47:02–80:14 | | Final audience Q&A and suggestions for student research topics | 80:14–86:46 |

For further information, the full lecture transcript is available from LSE Events.

LSE Public Lectures and Events

Episode Overview

Key Discussion Points and Insights

1. Understanding "Winner Takes All" Markets

[03:30–08:00]

Definition: Markets where top performers disproportionately gain market share and rewards, leaving most competitors with little, regardless of similar efforts.
Key features:
- Network effects: Value grows with more users, creating compounding advantages.
- Economies of scale: High fixed, low marginal costs create barriers to entry.
- First-mover advantage: Early entrants can lock-in market leadership.

Quote:

"A winner takes all market is where best performers disproportionately capture large rewards and market share and leave the competitors with minimal returns despite similar efforts."
— Padmashree Gehl Sampath [04:00]

2. Market Structures in AI vs. Pharmaceuticals

[08:00–13:30]

AI:
- Dominance driven by data, hardware/software ecosystems, and investment in scalable approaches.
- Firms like Nvidia exemplify the compounding cycle: more AI developers drive hardware demand, leading to more R&D and sustained advantage.
- Oligopolistic with cloud giants, model leaders, and hardware providers locking in users.
Pharmaceuticals:
- No strong network effects; drugs don’t become more effective with more users.
- Barriers to entry arise from regulatory approval, manufacturing complexity, and patent thickets—rather than exclusively R&D or data scale.
- Dominance maintained via patent extensions (device patents, therapy patents), not just technological superiority.

Quote:

"In the pharmaceutical sector, none of these [AI-like] conditions are met… A drug doesn't become more effective the more people that use it."
— Padmashree Gehl Sampath [10:30]

3. Mechanisms of Market Dominance in Pharmaceuticals

[13:30–23:00]

Case Study 1: Insulin Oligopoly

Dominance by Novo Nordisk, Eli Lilly, and Sanofi since the late 1990s.
Tight pricing coordination, patent “evergreening” on both insulin molecules and delivery devices.
- Original patents expire ~2016, but device and use patents extend exclusivity to 2040.
- Captured 97% of global market for two decades.

Quote:

"They practically captured about 97% of the global diabetes market for about 20 years...extension of patent monopoly from 2016 to about 2040."
— Padmashree Gehl Sampath [17:20]

Case Study 2: Monoclonal Antibodies (Humira & Keytruda)

Multiple layers of patents: formulation, method of use, device, user experience.
“Patent thickets” extend exclusivity beyond base patent expiry (2016–2036).
Other drugs like Keytruda and semaglutide follow similar strategies.

Case Study 3: Public R&D vs. Private Capture

Monoclonal antibodies and CAR-T therapies: foundational public funding; private firms patent and commercialize.
COVID-19 mRNA vaccines: massive public investment (e.g., US govt., Operation Warp Speed) enabled rapid innovation; raised questions about public leverage and access.

Quote:

“What we see is privatization of public research in most cases and intellectual property going to private firms when public sector research was the main precursor of those innovations.”
— Padmashree Gehl Sampath [27:30]

4. Declining Public R&D and Regulatory Capture

[25:30–30:00]

Across US, UK, Germany, public R&D investment as a share of GDP has fallen sharply, especially since the 1990s.
This decline shifts innovation leadership and direction to private sector firms, often prioritizing incremental innovation and market defense over radical breakthroughs.
Regulatory capture compounds dominance: firms shape IP policies, access debates, and regulatory standards in their favor.

Quote:

"Pharmaceutical firms are able to capture the law... access is seen as a distributional issue, not as an issue which needs to be counted when we construct innovation and R&D models."
— Padmashree Gehl Sampath [28:30]

5. Implications for Welfare, Innovation, and Policy

[30:00–38:00]

Market structures discourage truly disruptive innovation (“vertical innovation”), incentivize incrementalism, and can create future technology “valleys of death” where foundational research is lacking.
AI Risks: LLMs and other paradigms may become locked-in, crowding out alternative AI approaches.
Need for sector-specific, nuanced regulatory strategies rather than simple “pro-” or “anti-” tech stances. One size does not fit all.

Quote:

"We really cannot think of the world in the old sense of innovative firms and generic firms... every product category is different."
— Padmashree Gehl Sampath [31:30]

6. Insights from the Discussant: Dr. Laura Mann

[38:40–46:50]

Emphasizes:
- The importance of ecosystem thinking—beyond products, firms shape and maintain market dominance via regulatory and infrastructural strategies.
- Parallels in other sectors (e.g., agriculture, compliance mechanisms).
- The relevance of geopolitical rivalry (esp. US–China) in tech infrastructure.
- Urges case-by-case approaches to regulation, not generic policy.
- Raises questions for Padmashree:
  - Implications for developing countries and African integration.
  - Balancing access and commercial interest.
  - How the public can reclaim leverage over innovation direction.
  - The complexity of data centralization, especially in the health sector.
  - Talent flow: are “winner takes all” markets siphoning top skills, especially from the Global South?

Quote:

"We have to think in a specific way about regulation, how to do industrial policy... there's a lot of specific sector things going on and we really need a kind of varieties of digital capitalism approach."
— Laura Mann [41:45]

7. Q&A with Audience and Online Participants

Selected Topics and Quotes with Timestamps:

Global Development & African Context

[47:02–50:45]

Industrialization is foundational for development; current dynamics in pharma and AI worsen health and information security deficits in low-income countries.
African mRNA hub case: When big companies refused to license, African scientists reverse-engineered technology, causing delays but fostering local capacity.

Quote:

"We need to decentralize public R&D and create nodes in the developing world on how we can create the same kind of economics effects that big firms are able to create in the West."
— Padmashree Gehl Sampath [49:54]

Ecosystem Lock-in, Regulation, and Patent Strategies

[55:11–66:24]

Access-oriented firms exist, but are constrained by a broader ecosystem and shareholder value pressures.
Regulators and patient care groups can fall into the orbit of dominant firms, leading to widespread “capture.”
Example: Shift from human insulin to analogs, and competitive device patents, making even expired molecules hard to access in developing countries.

Policy, Public Interest, and Innovation Models

[68:18–74:23]

Call for informed, industry-specific regulation, not blanket policies.
The value of conditionalities: if public funding supports innovation, access and licensing requirements should be enforced as conditions of patents.

Developing World Strategies

[74:47–77:01]

Generics-only strategies insufficient; even top Indian or Chinese generic firms struggle to marshal R&D for novel innovation.
Need to rethink state support and public investment for true pharmaceutical and tech sector development.

Barriers to Change & Global Power Asymmetries

[77:26–80:14]

Opposition arises from industry associations, entrenched national interests, and even systemic misunderstanding of sector dynamics.
US dominance in tech and pharma is hard to counteract, though increased public R&D and European legal action may provide partial counterbalances.

Breaking Up Dominant Firms & Open Innovation

[80:14–84:10]

Antitrust action technically possible but rarely pursued due to national economic considerations—countries unwilling to break up their own “champions.”
Modular and open-source pharma (e.g., Open Insulin) seen as promising for democratic innovation and decentralized outcomes, but skills and resources remain a challenge.

Notable Quotes & Memorable Moments

On "Code is Law" in Regulation:

"Code is law... once you have some kind of software code, that's the one that decides what the extent of your privacy is. We need to think about the pharmaceutical sector in similar terms."
— Padmashree Gehl Sampath [32:40]
On Directed Technological Change:

"In winner takes all markets, it's actually the firm that sets the direction of the technological change. It's not society, it's not policymakers, it's not consumers."
— Padmashree Gehl Sampath [34:00]
On Public vs. Private Innovation Models:

"The model of innovation is very important. Private firms have a particular value... the question we need to pose ourselves is how do we make sure we create the right environment for private firms to uptake public discoveries and to create products, but in a competitive environment?"
— Padmashree Gehl Sampath [68:18]

Conclusion

Timestamps for Key Segments

For further information, the full lecture transcript is available from LSE Events.

Technology for the public interest: preventing capture and promoting welfare

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Summary

LSE Public Lectures and Events

Episode Overview

Key Discussion Points and Insights

1. Understanding "Winner Takes All" Markets

2. Market Structures in AI vs. Pharmaceuticals

3. Mechanisms of Market Dominance in Pharmaceuticals

Case Study 1: Insulin Oligopoly

Case Study 2: Monoclonal Antibodies (Humira & Keytruda)

Case Study 3: Public R&D vs. Private Capture

4. Declining Public R&D and Regulatory Capture

5. Implications for Welfare, Innovation, and Policy

6. Insights from the Discussant: Dr. Laura Mann

7. Q&A with Audience and Online Participants

Global Development & African Context

Ecosystem Lock-in, Regulation, and Patent Strategies

Policy, Public Interest, and Innovation Models

Developing World Strategies

Barriers to Change & Global Power Asymmetries

Breaking Up Dominant Firms & Open Innovation

Notable Quotes & Memorable Moments

Suggested Research Topics for Students

Conclusion

Timestamps for Key Segments

Summary

LSE Public Lectures and Events

Episode Overview

Key Discussion Points and Insights

1. Understanding "Winner Takes All" Markets

2. Market Structures in AI vs. Pharmaceuticals

3. Mechanisms of Market Dominance in Pharmaceuticals

Case Study 1: Insulin Oligopoly

Case Study 2: Monoclonal Antibodies (Humira & Keytruda)

Case Study 3: Public R&D vs. Private Capture

4. Declining Public R&D and Regulatory Capture

5. Implications for Welfare, Innovation, and Policy

6. Insights from the Discussant: Dr. Laura Mann

7. Q&A with Audience and Online Participants

Global Development & African Context

Ecosystem Lock-in, Regulation, and Patent Strategies

Policy, Public Interest, and Innovation Models

Developing World Strategies

Barriers to Change & Global Power Asymmetries

Breaking Up Dominant Firms & Open Innovation

Notable Quotes & Memorable Moments

Suggested Research Topics for Students

Conclusion

Timestamps for Key Segments