Corruption might exist, and I agree it should be eliminated. But the patent system is far, far older than this industry. And I doubt it would go away if you eliminated corruption.
>>If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
>Doubt that much, its quite a strong claim and requires strong evidence. My beef is that we have never even come close to testing this hypothesis
I don't think this is that controversial a claim. No one is preventing other countries from developing their own drugs, and some do. It's not like there is a finite number of chemicals or diseases that need treatment. In what way is the existence of US drug companies preventing anyone else from developing drugs?
>But if huge development costs are the reason for these protections to exist, guess what, these costs will continue to remain huge. Its just self perpetuating.
They have every incentive to decrease the costs wherever possible. It's just fundamentally a very expensive process. Especially if you want the very high levels of guaranteed drug safety and effectiveness that the FDA requires.
Nor has the opposite been tested. Personally, I would rather err on the side of having plentiful drugs. Also, I think the original argument makes sense, but that's an opinion as is yours.
The flaw in your reasoning is seeing the presence or absence of IP protection as an independent variable, and level of R&D as a function of that. I think both are dependent on the amount of cash pharma companies have to spend.
Indeed, and that is precisely why I want acceptable mechanisms to test the hypothesis and correct for it, adapt the estimates etc (all mentioned in the comment that you are responding to). The fix seems far from arbitrary blanket protection from market pressures. Just like so many other things the market needs to be actively co-opted into the mix to set the prices right, rather than being cordoned off.
> Nor has the opposite been tested
BTW I did not imply any direction in the test, so "opposite" does not quite apply as an adjective to the tests I have in mind. Perhaps "estimation" would have been a better word
(i) Futures market and (ii) bid to bring to public domain are the two market apparatus I could think of. Individuals with better knowledge in economics and finances would likely be able to come up with other mechanisms.
More accurately, you are paying higher because pharma can hire congressmen and senators
> If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
Doubt that much, its quite a strong claim and requires strong evidence. My beef is that we have never even come close to testing this hypothesis
One of the oft repeated justification for the absurd levels of IP protection and patent extensions that pharma enjoys is the huge cost of trials. But if huge development costs are the reason for these protections to exist, guess what, these costs will continue to remain huge. Its just self perpetuating.
Patents are primarily a preemptive measure against a hypothetical scenario. The hypothesis is that unless market pressures are cordoned off, innovation will stop. It is a believable hypothesis but not a quantitative one, and this exactly where we need a quantitative one. How many years exactly does one need to subvert the market so that a satisfactory level of innovation is maintained ? Nobody knows an authoritative answer.
In these scenario what we need is a feedback system, and pretty much the only scalable and fair apparatus that we have for such feedback on economic affairs is the market.
So rather than subverting the market, market should be explicitly and actively involved to work out this trade-off. How exactly this is to be done needs to be worked out.
There could be a futures market on patents on drugs undergoing testing: competitors can promise to buy the patent to the (drug,usecase) pair at a particular price (even if its a dud) and if the owner decides not to sell the owner pay a particular compensation. Such measures will spread the risk. There should be mechanisms for a company to raise money for testing in lieu of rights over the product.
The initial period of validity of a patent should be short, like 3~6 years, following which the patent is on the market. Entities can bid to bring the patent to public domain. The owner(s) bids to retain it. Whoever wins gets the balance. Of course the "bring it to public domain" bidders will bid less because profitability is less when its in the public domain, but market decides who gets to own it. If the owner(s) think they can still extract lots of profit from the drug, bid high. We should stop handing out blank checks without a feedback loop, that is just bad design.
[p.s. fun to watch the votes go up and down :)]