4 ms·

> Notably, patents of life-sustaining medicines utterly destroy that cornerstone of capitalism. People can and will pay almost anything to get that drug, so the

> Notably, patents of life-sustaining medicines utterly destroy that cornerstone of capitalism. People can and will pay almost anything to get that drug, so the seller can charge what it wants - that's not capitalism as it's supposed to work, that's a hostage scenario. I don't think it is appropriate to compare a drug company that created a life-saving drug to a hostage taker. And in this scenario it is particularly inappropriate, because they are charging less for the drug than the previous best treatments cost! Furthermore, there is an alternative here. The patent only covers this one cure. You are welcome to go out and spend $2-3 billion to try to create your own drug. (But that would be pretty risky, wouldn't it? And good luck raising the money if you plan on giving the drug away.)

ldrndll 10y ago
I think there's some middle ground that could be found here. For arguments sake, how about: 1. A drug company can charge whatever it wants for a drug until some predefined multiple of the cost of developing the drug is recovered. 2. After that point, the patent expires and its up to the free market to determine prices. Set the multiple of R&D costs high enough that it allows for the low success rate of drug research, and you have a model that still encourages risk taking whilst preventing profiteering.
- emn13 10y ago
  "The cost" is a gameable concept. Also, this proposal means that while the patent is not expired, production is still monopolized. And there is the issue of testing vs. research. There is an argument to be made that drug development isn't the hard part (or at least not always). The hard part is figuring out how to use the drug, and doing clinical trials to prove efficacy and safety. E.g. we currently live in the wonky situation where there is little incentive to discover new uses for existing out-of-patent drugs. It's much more worthwhile to find a new drug that does the same thing. I think patents-as-monopolies are a bad idea. A citation-based subsidy and/or fixed license fee, preferably on a decreasing schedule with a capped or only slowly growing integral would align motives with outcomes more clearly. I mean, I don't see the problem if research becomes independently specialized from exploitation.
emn13 10y ago
Right, so in this case there was a tiny modicum of competition, and the smart company selling the drug priced their product appropriately. However, that does not mean that they (or some other organization) couldn't have developed this drug for less. The question isn't whether it's better that what came before, the question is whether it's efficient. If there were many buyers and sellers, you'd have some faith that is at least approximately efficient. But with just one seller, they could recoup their costs many, many times over. That's terribly inefficient - those resources could be better used elsewhere. And it's quite a bit worse than that - by being so inefficient, you're creating all kinds of perverse incentives. Instead of trying to find and create a worthwhile drug, the aim is to find those drugs with captive audiences. The Martin Shkreli saga illustrates that quite blatantly. The appropriate benchmark is efficiency, not whether the drug at the offered price is better than nothing.

ldrndll 10y ago

I think there's some middle ground that could be found here. For arguments sake, how about: 1. A drug company can charge whatever it wants for a drug until some predefined multiple of the cost of developing the drug is recovered. 2. After that point, the patent expires and its up to the free market to determine prices. Set the multiple of R&D costs high enough that it allows for the low success rate of drug research, and you have a model that still encourages risk taking whilst preventing profiteering.

emn13 10y ago
"The cost" is a gameable concept. Also, this proposal means that while the patent is not expired, production is still monopolized. And there is the issue of testing vs. research. There is an argument to be made that drug development isn't the hard part (or at least not always). The hard part is figuring out how to use the drug, and doing clinical trials to prove efficacy and safety. E.g. we currently live in the wonky situation where there is little incentive to discover new uses for existing out-of-patent drugs. It's much more worthwhile to find a new drug that does the same thing. I think patents-as-monopolies are a bad idea. A citation-based subsidy and/or fixed license fee, preferably on a decreasing schedule with a capped or only slowly growing integral would align motives with outcomes more clearly. I mean, I don't see the problem if research becomes independently specialized from exploitation.

emn13 10y ago

Right, so in this case there was a tiny modicum of competition, and the smart company selling the drug priced their product appropriately. However, that does not mean that they (or some other organization) couldn't have developed this drug for less. The question isn't whether it's better that what came before, the question is whether it's efficient. If there were many buyers and sellers, you'd have some faith that is at least approximately efficient. But with just one seller, they could recoup their costs many, many times over. That's terribly inefficient - those resources could be better used elsewhere. And it's quite a bit worse than that - by being so inefficient, you're creating all kinds of perverse incentives. Instead of trying to find and create a worthwhile drug, the aim is to find those drugs with captive audiences. The Martin Shkreli saga illustrates that quite blatantly. The appropriate benchmark is efficiency, not whether the drug at the offered price is better than nothing.