Home > Uncategorized > We can develop new drugs without patent monopolies # 54,217

We can develop new drugs without patent monopolies # 54,217

from Dean Baker

It is often said that intellectuals have a hard time dealing with new ideas. This is perhaps nowhere better demonstrated with the fixation with patent monopolies as the primary mechanism for financing the development of new drugs.

Bloomberg gave us a beautiful example of this narrow mindedness with a column from Max Nisen on the possibility that China may require the compulsory licensing of a patent on a drug developed by Gilead, in order to produce a treatment for the Coronavirus. A compulsory license means that sacrificing the monopoly Gilead had expected, which means it will only get a small fraction of the revenue it might have otherwise anticipated. Nisen is concerned that this lost revenue will reduce expected profit in the future, meaning that companies like Gilead would have much less incentive in developing cures for epidemics like the Coronavirus.

While drug companies do operate to make a profit, the part of the story that Nisen misses is that the profit does not have to be gained through patent monopolies. Suppose that the U.S. and other governments put up research funding, which private corporations like Gilead could bid on based on their expertise and track record. In this case, a condition of the research is that all patents would be in the public domain (the companies were already paid for their work) and all results would be fully public as soon as practical.

If anyone was seriously concerned about combating epidemics like the Coronavirus, this would seem to be the best route to go. We should want researchers all around the world to be sharing results and in other ways cooperating to solve a common problem. Advanced funding would encourage this sort of cooperation as opposed to the patent system, which encourages researchers to squirrel away findings so as not to give an edge to competitors.

That fact, and the other benefits should be obvious to anyone who writes on this issue, but as we know, intellectuals have a hard time dealing with new ideas.

  1. February 12, 2020 at 12:53 pm

    Thank you for clearly explaining another way is possible via cooperation.

  2. February 12, 2020 at 2:25 pm

    this idea already exists in that universities obtain financing from the government. The government retains certain rights as does the university (United States). The key, of course, is that the devil is in the details. Areas not limited to health.

    Similarly, there are agreements between the private sector and government.

    All open to review, refinement and flexibility

  3. February 12, 2020 at 3:00 pm

    If the problem is with the intellectuals, perhaps it might help to couch the issue in terms of the separation of variables. Researchers need crediting with a respectable livelihood and the accomodation, tools and materials they need to do their job, and their administrators likewise. Surely they have already profited by having that, and the community by having the work done? So in reality profit (however defined) is not the problem. What is is the conflation of profit with livelihood, when in fact it is something over and above that. John Ruskin, following up his “Unto This Last” anticipation of univeral incomes, suggested honorary recognition as in “The Crown of Wild Olive”. Today we might think of Nobel prizes as something similar: a reward for exceptional work already done, not industrial work contingent on sales and rents. In the present discussion, if it should turn out that Gilead’s work led to the timely production of an anti-coronavirus medicine, China would doubtless be very happy to recognise the value of this group’s work with an honorary bonus?

    • February 12, 2020 at 9:14 pm

      The issue is far more complex. For example it’s the same argument that college sports associations have used saying that the players receive an education and related benefits rather than any return on the use of their names or promotional efforts.

  4. Ed Zimmer
    February 12, 2020 at 7:31 pm

    IMO, patents should not convey a monopoly position (ie, forbidding use by others). Rather it should be available to all at fixed price (perhaps related to invested cost) or fixed rate related to sales.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.