Against Intellectual Monopoly[1], shows rather strong empirical evidence to the contrary: drug development thrived before patents arrived, and didn't accelerate after. They may even have slowed down.
Your argument is appealing, but most probably wrong.
[1]: http://levine.sscnet.ucla.edu/general/intellectual/againstfi...
Also, I wasn't assuming any kind of 'artificial encouragement'. I was talking about firms spending hundreds of millions of dollars researching drugs, and wanting to earn that back (and, obviously, more) through patent protection. There's nothing artificial about the kind of encouragement that comes from wanting to recoup hundreds of millions of dollars.
It looks like you think that for pharmaceutical to thrive, it needs corporation to be "encouraged" to invest lots of money. You also seem to think that patents are a major provider of that encouragement. If so, the introduction of the patent system should have accelerated innovation.
Empirical evidence shows that it didn't.
I see only 2 explanations: either patents are not an effective encouragement (compared to already existing ones), or their disadvantages nullifies the additional encouragement.
Forget the abstract arguments about corporations being "encouraged" or whatever you think I think. Just tell me how it would work.
If it helps, imagine that you run a pharmaceutical firm, and you have the choice to spend hundreds of millions of dollars researching a drug which, once perfected by your researchers, is not owned in any sense (even temporarily) by you, but rather immediately becomes a generic commodity worth fractions of a cent per unit, and which cannot possibly earn you back the money you spent developing it. In that situation, would you start the research? And if not, where will the new drugs come from?
Ha ha, that's the beauty of it: I don't know. I just know it works. I know it from a source[1] which I consider reliable. And that source presented empirical observations which strongly support my view.
You keep talking about how it would work, doing what's amounts to a thought experiment. That's valuable, but not nearly as good as actual observations in assessing how the world works.
From the dawn of humanity, the Sun has been observed to rise from a direction and set to a roughly opposite direction. Why? How? For a very long time, no one knew. But only a fool would contradict that observation just because what he thinks of the sun doesn't fit what everybody sees.
In short, when your view of the world doesn't fit the observations, update your view of the world.
Now, I see very few ways in which you could still disagree with me: (1) You think I misreported my source. (2) You don't trust my source. (3) You know of very strong evidence which support your view and not mine. So which it is?
[1]: Against Intellectual Monopoly
What countries are you talking about, what years, what drugs? How did the companies cover the cost of research? What was in it for them? Why did they do it?
I am perfectly willing to amend my views but so far you have done nothing but say you have evidence. Show me! I don't have time to read your source but I am happy to read what you quote as relevant.
Ah, now we're talking. So, chapter 9, page 247 http://levine.sscnet.ucla.edu/papers/imbookfinal09.pdf
""" You may wonder why we are offering all these details about specific countries, patenting of chemical processes, and pharmaceutical products. For a very simple reason: if patents were a necessary requirement for pharmaceutical innovation as claimed by their supporters, the large historical and cross country variations in the patent protection of medical products should have had a dramatic impact on national pharmaceutical industries. In particular, at least between 1850 and 1980, most drugs and medical products should have been invented and produced in the United States and the United Kingdom, and very little if anything in continental Europe. Further, countries such as Italy, Switzerland and, to a lesser extent, Germany, should have been the laggards of the pharmaceutical industry until recently. Instead the opposite was true for longer than a century."""
I fear you would have to read "all these details about specific countries" if you want anything more substantial. That's 7 pages (from 241 to 247).
"the total cost of bringing a new drug to market [is] around $800 million, in year 2000 dollars... [T]his figure suggests a spectacular increase in the cost of innovating. This increase is due, mostly, to the capitalization of the longer and more expensive clinical trials the FDA requires."
It may well be that patents were not always necessary for drug development. It is lazy thinking to conclude from this that they are not necessary now.
Correct. We may want to test for that, if at all possible. Also, if we manage to reduce the costs of clinical trials, we may make that point moot. But in the end, I fear we will have to set priorities, and make compromises. I just hope that it will be based on rational judgements, instead of political stances alone.
I don't know. Nor am I aware of any study which shows regulation's effects, or lack thereof. I'm just saying that if regulation has benefits, they should be compared to the drawbacks before we forfeit them. If it has no benefit, of course get rid of it.
Anyway, as I said, I don't know a thing about pharmaceutical regulations. If you do, a few pointers would be welcome.
This assumes that the cost of developing drugs has remained constant, of course.
Not that I don't like being healthy, but the new pharamaceuticals are just stuff that makes you not die, rather than cure the disease and it is developed only because the patent on the old stuff is on the verge on running out.
A better way would be by removing all the nonessential regulation that makes such medicine so bloody expensive in the first place.
And I'm sure that if your children developed some terrible illness, you wouldn't want to use any pharmaceuticals to keep them alive longer, because - as you say - the disease might get them in the end anyway.
"Stuff that makes you not die" is, as you point out, obviously worthless to everyone.
My point isn't that pharma companies don't make money. It's that if you took away patent protection, they wouldn't invest in new drugs, because they would never earn anything on those investments.
Your point here is wrong. Unless you can tell why the empirical evidence I speak of is inconclusive or non-existent, I suggest you accept it.
Name the drugs.
edit: Also, explain (as I keep asking you to) how it is that the companies are to earn back the money spent on the R&D investments, if there are no patents. You say there is plenty of empirical evidence. Tell me how it is done.
I'm not pro-patents on everything, but pharmaceuticals is a case where the patent bargain seems to produce benefits in terms of drugs that otherwise might not be developed.