This is a difficult decision to rule on, without resorting to petty emotions, without access to the underlying data. One must balance the incentive for drug companies to develop drugs (and get that development financed) with the price inelasticity of the healthcare market.
There is marginal cost, the cost to produce one more product independent of development cost, and fully amortised cost, which amortises the development (and, holistically, finances future development). Saying we should abolish innovator drug patents ignores the latter.
If we take the assumption that a life tomorrow is worth about a life today cutting pharma's revenues 97% means the development model is unsustainable. The government would have to develop drugs (or promise to refund all or most of the cost of developing a drug that gets FDA approved).
On the other hand we know that, since most people will pay whatever they able to for healthcare, drug companies have too much leverage. The market doesn't function well un-aided.
The problem here is the way this decision has been implemented throws up a lot of regulatory uncertainty. Having an objective framework for how innovator drug companies can be subject to need-based forced licencing (and under what boilerplate terms) would allow pharma companies to plan how to allocate development dollars.
> On the other hand we know that, since most people will pay whatever they able to for healthcare
"we" don't know that. In fact, we know that it's wrong.
When people are spending their own resources, they plan their non-emergency spending.
For example, I'll bet that you don't take the vitamins that you should. You probably also don't exercise as you should. It's money and time that you could easily afford, yet ....
An even better example is that many (most?) folks don't choose the most expensive health-plan at work when they have to pay the difference between it and a less expensive plan.
And then there are Flex spending plans. Folks put money into those plans so they can pay for health care with pre-tax money, giving them lower out of pocket costs for healthcare.
Look at how people handle their deductibles and co-pays - again, they try to minimize their costs.
While assuming that a life tomorrow is worth about a life today might be reasonable, we're talking about research costs for drugs, and the comparison does not hold to assume that a new drug tomorrow is worth about an already existing drug today.
New drugs are often about squeezing out those last few years of life-expectancy, and even if they're not, they're a marginal increase over today's drugs. Meanwhile today's drugs fail to save many many lives because they are unaffordable in order to pay for R&D on new drugs (which will also be unaffordable).
See, the system is very broken on both sides.
But the choice to me seems very clear:
- on the one hand you have +developing new future drugs. except those drugs will only be affordable to a tiny fraction of the world population. additionally this lines the pockets of big pharma and the bureaucracy that keeps the system broken as it currently is ("Bayer was disappointed")
- on the other hand developing new drugs will be slowed down for some time, but all people will be able to afford the many current ones that could be saving lives today, big pharma + your FDA bureaucracy will fail and maybe that opens room for a new and better system to emerge so that R&D on drugs may start once more but in a more efficient manner. All the while lives are being saved and quality of live is being improved because today's drugs are affordable to everyone.
Every drug we enjoy today was once a future drug. Your reasoning promotes the equivalent of seizing all investment dollars from VC and IPO investors and using it to spread existing inventions and innovations to a broader base.
Lives are being saved and quality of life improving...for everyone who doesn't have a disease we haven't yet cured or which hasn't become treatment resistant (biology is adamantly lassez-faire).
The industry needs regulatory upheaval and new ways of financing itself. But if the response is to throw away the ability to recoup the initial investment profitably, medical research will just start devoting funds to making treatments exclusive, e.g. only invest in custom/on-site medicine.
There is marginal cost, the cost to produce one more product independent of development cost, and fully amortised cost, which amortises the development (and, holistically, finances future development). Saying we should abolish innovator drug patents ignores the latter.
If we take the assumption that a life tomorrow is worth about a life today cutting pharma's revenues 97% means the development model is unsustainable. The government would have to develop drugs (or promise to refund all or most of the cost of developing a drug that gets FDA approved).
On the other hand we know that, since most people will pay whatever they able to for healthcare, drug companies have too much leverage. The market doesn't function well un-aided.
The problem here is the way this decision has been implemented throws up a lot of regulatory uncertainty. Having an objective framework for how innovator drug companies can be subject to need-based forced licencing (and under what boilerplate terms) would allow pharma companies to plan how to allocate development dollars.