4 ms·

This is not a colossally bad idea, it is a colossally good one (though maybe not as suggested), and perhaps the best way to end the stupid patent circus that is

This is not a colossally bad idea, it is a colossally good one (though maybe not as suggested), and perhaps the best way to end the stupid patent circus that is ruining biomedical research. We need not replace grants this way, of course - but we can supplement, because grants, as we all know, can't even begin to cover the cost of clinical trials, for the most part. This means that only large pharma companies can foot the bill, here. Then they walk off with a patent and collect monopoly rents from the American public to the tune of $300 billion a year, in excess of the market cost of drug production. If, on the other hand, we can offer a large prize that covers the costs of development after the fact, then we get the goods - development already works this way, the "prize" is simply in the form of a drug company buying you out for your IP. In the alternative, the US government "buys you out" for several tens of millions. The drug, instead of being patented, goes into the public domain. The developers walk off with tons of money. The public saves hundreds of billions of dollars. Income inequality lessens.

Thriptic 11y ago
80 million dollars wouldn't even begin to cover the development / trial costs of a single drug, let alone many. Many drugs also fail late in the clinical trial process (phase 2+), meaning that 80 million dollars would just disappear upon failure. I highly doubt the government has the stomach to eat those losses.
- astazangasta 11y ago
  Why not? The government can easily, easily pick up the tab for clinical trials, which amount to pennies compared to the amount it is shelling out in prescription drug costs via Medicare. It already does, to a great extent, and it's so heavily involved in the process it seems natural to make them eat the costs.
  - Thriptic 11y ago
    > It already does, to a great extent, and it's so heavily involved in the process it seems natural to make them eat the costs As far as I know, the government has minimal involvement / skin in the private development process as it stands currently, and only steps in to perform regulatory oversight and helps define trial design for regulatory approval. Almost all costs are borne by the private sector and all work is done by the private sector.
    - VLM 11y ago
      "Almost all costs are borne by the private sector" Doesn't every penny of "old people drugs" development come from selling drugs to old people paid solely by medicare? I'm just saying if you trace back where those supposed private sector $$ come from, don't almost 100% of them come from the Medicare program? On the good side you'd cut out a lot of middlemen. No point paying them off thru multiple steps for doing basically nothing productive. On the bad side you'd cut out a lot of middlemen. Their corporate owners finance a lot of re-election campaigns and PACs....
      - Thriptic 11y ago
        > Doesn't every penny of "old people drugs" development come from selling drugs to old people paid solely by medicare? I'm not sure what this statement means. Drug development costs are accrued by the company before the drug goes to market. Costs are borne by the company's investors or offset using profits from previous ventures. Some of these profits may be from drugs meant for the elderly or they may not. > I'm just saying if you trace back where those supposed private sector $$ come from, don't almost 100% of them come from the Medicare program? No, much of the initial development capital comes from investors or from other profits which are from many sources. If you're talking about who is paying for the drug, then you're completely forgetting about private insurance companies, which spend at least as much each year on health care costs as medicare. You're also forgetting about the entire ex-US market. > On the good side you'd cut out a lot of middlemen. No point paying them off thru multiple steps for doing basically nothing productive. Government is not synonymous with efficiency, especially when there is no profit motive involved.
        astazangasta 11y ago
        Government is often quite efficient. For example, public health insurance has smaller overhead (like five fold less) than equivalent private products. In terms of R&D there is no contest. The entire NIH budget produces prodigious amounts of research, from the basic to the translational, for less than what the entire pharma industry spends just to refine their drug development. The private sector sucks at research spending.
  - jcranmer 11y ago
    The cost to develop a new drug is, on average, $2.6 billion (see, e.g., <http://lifescivc.com/2014/11/a-billion-here-a-billion-there-the-cost-of-making-a-drug-revisited/> http://lifescivc.com/2014/11/a-billion-here-a-billion-there-...), including the amortized costs of failed candidates. Or, put another way, it looks like a new aircraft supercarrier would be cheaper than a cure for Alzheimer's. Whatever the true cost of drugs are, it's clearly not pennies.
    - astazangasta 11y ago
      The cost is negative, when you consider how much money would be saved by not having to pay out monopoly rents for decades to drug companies.
cafebeen 11y ago
It should be noted that gov't funded research at universities doesn't necessarily go into the public domain and can still be patented: https://en.wikipedia.org/wiki/Bayh–Dole_Act https://en.wikipedia.org/wiki/Bayh–Dole_Act
- astazangasta 11y ago
  But we'd make this a condition of the prize, that the drug would go into the public domain upon victory, exactly to avoid the disgusting patent.
  - thedufer 11y ago
    Why would anyone apply for the prize in that case? The IP rights on anything reasonably successful will be worth way more than the prize money.
    - astazangasta 11y ago
      Me and my six scientist friends don't give a shit about the IP rights. We're not going to see those billions anyway, the owners of Roche are. I'd much rather take the same payout from the US government. Plus, after a decade of this shit, without their monopoly rents there won't be any drug companies to buy the IP from you anyway.
      - thedufer 11y ago
        So what you're saying is that, if those IP rights are worth billions of dollars, the company that stands to make that won't outbid an $80M prize? I'm a little skeptical. That would be a bizarre decision for a for-profit company to make.
  - mlinksva 11y ago
    This would be good, but the proposal seems ambiguous at best: > NO AWARDS TO COMPETITORS LIKELY TO REAP FINANCIAL BENEFIT FROM INNOVATION.—The Director of NIH may not, with respect to an innovation, award a prize under this section to any individual or entity that has a vested financial interest in any product or procedure that is likely to be developed or marketed because of such innovation. One way to ensure that would be to require that any winning or better submitted innovations come with a royalty-free patent license. But > (i) Intellectual Property.— “(1) PROHIBITION ON THE GOVERNMENT ACQUIRING INTELLECTUAL PROPERTY RIGHTS.—The Federal Government may not gain an interest in intellectual property developed by a participant in a prize competition under this section without the written consent of the participant. “(2) LICENSES.—The Federal Government may negotiate a license for the use of intellectual property developed by a participant in a prize competition under this section.”. Clearly no such thing is mandated.

Thriptic 11y ago

80 million dollars wouldn't even begin to cover the development / trial costs of a single drug, let alone many. Many drugs also fail late in the clinical trial process (phase 2+), meaning that 80 million dollars would just disappear upon failure. I highly doubt the government has the stomach to eat those losses.

astazangasta 11y ago
Why not? The government can easily, easily pick up the tab for clinical trials, which amount to pennies compared to the amount it is shelling out in prescription drug costs via Medicare. It already does, to a great extent, and it's so heavily involved in the process it seems natural to make them eat the costs.
- Thriptic 11y ago
  > It already does, to a great extent, and it's so heavily involved in the process it seems natural to make them eat the costs As far as I know, the government has minimal involvement / skin in the private development process as it stands currently, and only steps in to perform regulatory oversight and helps define trial design for regulatory approval. Almost all costs are borne by the private sector and all work is done by the private sector.
  - VLM 11y ago
    "Almost all costs are borne by the private sector" Doesn't every penny of "old people drugs" development come from selling drugs to old people paid solely by medicare? I'm just saying if you trace back where those supposed private sector $$ come from, don't almost 100% of them come from the Medicare program? On the good side you'd cut out a lot of middlemen. No point paying them off thru multiple steps for doing basically nothing productive. On the bad side you'd cut out a lot of middlemen. Their corporate owners finance a lot of re-election campaigns and PACs....
    - Thriptic 11y ago
      > Doesn't every penny of "old people drugs" development come from selling drugs to old people paid solely by medicare? I'm not sure what this statement means. Drug development costs are accrued by the company before the drug goes to market. Costs are borne by the company's investors or offset using profits from previous ventures. Some of these profits may be from drugs meant for the elderly or they may not. > I'm just saying if you trace back where those supposed private sector $$ come from, don't almost 100% of them come from the Medicare program? No, much of the initial development capital comes from investors or from other profits which are from many sources. If you're talking about who is paying for the drug, then you're completely forgetting about private insurance companies, which spend at least as much each year on health care costs as medicare. You're also forgetting about the entire ex-US market. > On the good side you'd cut out a lot of middlemen. No point paying them off thru multiple steps for doing basically nothing productive. Government is not synonymous with efficiency, especially when there is no profit motive involved.
      - astazangasta 11y ago
        Government is often quite efficient. For example, public health insurance has smaller overhead (like five fold less) than equivalent private products. In terms of R&D there is no contest. The entire NIH budget produces prodigious amounts of research, from the basic to the translational, for less than what the entire pharma industry spends just to refine their drug development. The private sector sucks at research spending.
- jcranmer 11y ago
  The cost to develop a new drug is, on average, $2.6 billion (see, e.g., <http://lifescivc.com/2014/11/a-billion-here-a-billion-there-the-cost-of-making-a-drug-revisited/> http://lifescivc.com/2014/11/a-billion-here-a-billion-there-...), including the amortized costs of failed candidates. Or, put another way, it looks like a new aircraft supercarrier would be cheaper than a cure for Alzheimer's. Whatever the true cost of drugs are, it's clearly not pennies.
  - astazangasta 11y ago
    The cost is negative, when you consider how much money would be saved by not having to pay out monopoly rents for decades to drug companies.

cafebeen 11y ago

It should be noted that gov't funded research at universities doesn't necessarily go into the public domain and can still be patented: https://en.wikipedia.org/wiki/Bayh–Dole_Act https://en.wikipedia.org/wiki/Bayh–Dole_Act

astazangasta 11y ago
But we'd make this a condition of the prize, that the drug would go into the public domain upon victory, exactly to avoid the disgusting patent.
- thedufer 11y ago
  Why would anyone apply for the prize in that case? The IP rights on anything reasonably successful will be worth way more than the prize money.
  - astazangasta 11y ago
    Me and my six scientist friends don't give a shit about the IP rights. We're not going to see those billions anyway, the owners of Roche are. I'd much rather take the same payout from the US government. Plus, after a decade of this shit, without their monopoly rents there won't be any drug companies to buy the IP from you anyway.
    - thedufer 11y ago
      So what you're saying is that, if those IP rights are worth billions of dollars, the company that stands to make that won't outbid an $80M prize? I'm a little skeptical. That would be a bizarre decision for a for-profit company to make.
- mlinksva 11y ago
  This would be good, but the proposal seems ambiguous at best: > NO AWARDS TO COMPETITORS LIKELY TO REAP FINANCIAL BENEFIT FROM INNOVATION.—The Director of NIH may not, with respect to an innovation, award a prize under this section to any individual or entity that has a vested financial interest in any product or procedure that is likely to be developed or marketed because of such innovation. One way to ensure that would be to require that any winning or better submitted innovations come with a royalty-free patent license. But > (i) Intellectual Property.— “(1) PROHIBITION ON THE GOVERNMENT ACQUIRING INTELLECTUAL PROPERTY RIGHTS.—The Federal Government may not gain an interest in intellectual property developed by a participant in a prize competition under this section without the written consent of the participant. “(2) LICENSES.—The Federal Government may negotiate a license for the use of intellectual property developed by a participant in a prize competition under this section.”. Clearly no such thing is mandated.