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The same people who are investing in biotech now would be the ones investing in it then. Inventors may do it for fun but capital needs to generate an ROI to ju

The same people who are investing in biotech now would be the ones investing in it then. Inventors may do it for fun but capital needs to generate an ROI to justify its existence and in a growth obsessed global economy, scientific and technological progress leading to spending power increases is the only reliable growth mechanism. Massive underinvestmet in long term prospects and over reliance on government granted monopolies is a symptom of our IP system, not an argument for its existence.

edanm 8y ago
I'm... not sure where we disagree? Except for your first and last sentences? I mean, the whole point of granting a monopoly is to give incentives to investors to invest in biotech, so that they can reap the reward of it. You haven't explained why an investor will choose to invest in something at the same level, if they aren't able to get the same money back for it? If a drug company didn't have a monopoly, the generics that drive down the price of the drug would be out the day after the drug, thus ruining most potential profits. Therefore, developing new drugs wouldn't be worth as much money, so less people will invest in it. You seem to completely agree with this point when you write: "Inventors may do it for fun but capital needs to generate an ROI to justify its existence and in a growth obsessed global economy, scientific and technological progress leading to spending power increases is the only reliable growth mechanism." The whole (practical) idea of the capitalistic system in e.g. the US is to align private incentives with public incentives, so if someone develops a worthwhile drug (or e.g. writes a good book), they will be able to receive a reward for it. Just because scientific and tech progress is the only growth mechanism, doesn't give any one specific investor the incentive to invest in it (I forget the technical term for it, it's a kind of commons problem). Again, I'm not sure I understand you, because you seem to be saying something similar, but coming to a completely different conclusion?
- TACIXAT 8y ago
  Ok, I was writing a reply and I got to talking about how we do not have perfect markets, we do not have infinite suppliers that would drive the profit to zero. That actually got me asking an interesting question, do we have "infinite supply"? Do we have the means to produce medicine for everyone? This might put a finger on a weird feeling I have about the economy right now. We have a trillion dollar company that is producing easily copied electronics (their operating system is harder to replicate), we have very drugs that can be easily ripped off into generics, we have media that commands hundred plus dollar a month subscriptions that can be readily shared online. I guess the feeling that I can finally put to words is that all of this stuff is horribly mispriced. Would there be a single initial investment? No, probably not. There would still be profit opportunity though. Innovation would be spread between more parties. Rather than one company doing huge amounts of R&D it would be many individuals making incremental improvements, to address their own needs or to address profit opportunities. It is the same with software ideas, I could tell you my most brilliant idea (give up my monopoly) but the chances that you would go and implement it are low. Not everyone is going to be producing generics, not everyone can, not everyone wants to. The profit does not go to zero, hopefully it would just go to affordable.

edanm 8y ago

I'm... not sure where we disagree? Except for your first and last sentences? I mean, the whole point of granting a monopoly is to give incentives to investors to invest in biotech, so that they can reap the reward of it. You haven't explained why an investor will choose to invest in something at the same level, if they aren't able to get the same money back for it? If a drug company didn't have a monopoly, the generics that drive down the price of the drug would be out the day after the drug, thus ruining most potential profits. Therefore, developing new drugs wouldn't be worth as much money, so less people will invest in it. You seem to completely agree with this point when you write: "Inventors may do it for fun but capital needs to generate an ROI to justify its existence and in a growth obsessed global economy, scientific and technological progress leading to spending power increases is the only reliable growth mechanism." The whole (practical) idea of the capitalistic system in e.g. the US is to align private incentives with public incentives, so if someone develops a worthwhile drug (or e.g. writes a good book), they will be able to receive a reward for it. Just because scientific and tech progress is the only growth mechanism, doesn't give any one specific investor the incentive to invest in it (I forget the technical term for it, it's a kind of commons problem). Again, I'm not sure I understand you, because you seem to be saying something similar, but coming to a completely different conclusion?

TACIXAT 8y ago
Ok, I was writing a reply and I got to talking about how we do not have perfect markets, we do not have infinite suppliers that would drive the profit to zero. That actually got me asking an interesting question, do we have "infinite supply"? Do we have the means to produce medicine for everyone? This might put a finger on a weird feeling I have about the economy right now. We have a trillion dollar company that is producing easily copied electronics (their operating system is harder to replicate), we have very drugs that can be easily ripped off into generics, we have media that commands hundred plus dollar a month subscriptions that can be readily shared online. I guess the feeling that I can finally put to words is that all of this stuff is horribly mispriced. Would there be a single initial investment? No, probably not. There would still be profit opportunity though. Innovation would be spread between more parties. Rather than one company doing huge amounts of R&D it would be many individuals making incremental improvements, to address their own needs or to address profit opportunities. It is the same with software ideas, I could tell you my most brilliant idea (give up my monopoly) but the chances that you would go and implement it are low. Not everyone is going to be producing generics, not everyone can, not everyone wants to. The profit does not go to zero, hopefully it would just go to affordable.