February 24, 2015
For thousands of years we have seen people develop knowledge and skills, make discoveries, and advance science. The overwhelming majority of this work was not motivated by the hope of getting a patent monopoly. Yet somehow, the ostensibly serious people at the Association of University Technology Managers think that patent monopolies are the only way to support the development of new drugs, or so it would seem from a speech to them by Joseph Allen.
Mr. Allen took issue with my suggestion that if the government funds research that the findings and any associated patents should be placed in the public domain. He pointed to the period before the Bayh-Dole Act when there were:
“28,000 inventions wasting away on the shelves in Washington because there was no patent incentive for anyone to develop them.”
Okay, let’s try to get this straight. Suppose that the government made its funding partly contingent on developing a usable product approved by the Food and Drug Administration (FDA). Would all the inventions still sit on the shelf because people are too dumb to make a usable product without the motivation of a patent monopoly?
Suppose that the funding even went to private companies who would see their payments increase 50 percent, 100 percent, or even 200 percent if they get a usable product approved by the FDA. Even in that case the inventions would just sit on the shelf because there are no patent monopolies?
One has to wonder what it is about developing drugs that require patent monopolies when people in so many other areas can be motivated simply by money. It’s a great mystery.
Addendum:
There are several good points raised in the comments so let me add a bit more. First, I don’t have a problem with people getting money and possibly even lots of money for great breakthroughs in the development of new drugs. There are people like Jonas Salk, the inventor of the first effective polio vaccine, who was motivated primarily by the desire to help humanity. But I wouldn’t count on such people to carry the load. If people can get lots of money for running a big company or underwriting stock and bond issues, there is no reason to begrudge them a big paycheck for a major breakthrough in treating cancer or AIDS.
To me the point is that the patent system is an incredibly inefficient mechanism for providing the paycheck. I have argued that a system of direct government funding, at least for the clinical trials (this is where we get the misrepresented results) if not for the whole process. If you want a model, look at military contracting. This is far from a great system, but we do get very good weapons.
And unlike the case with the military, there is no rationale for secrecy in health research. A condition of the funding should be that all research findings are posted on a website as soon as practical. All results for clinical trials would be in publicly accessible data bases so that researchers could further analyze them and doctors could assess the results to determine which drugs are best for their patients. (The arthritis drug that is best for a 30-year-old woman in good general health may not be the same as for a 70-year-old man with a variety of health conditions. Access to full test data may make it easier for doctors to make an informed choice.)
In terms of companies manipulating research results in such a system, what would be the point? The companies doing the research are not likely to be the ones manufacturing the drug and even if they are, they are just getting the right to sell it in a free market in the same way that aspirin and scissors are sold in a free market. Are we going to see massive fraud so that companies can sell a few more prescriptions where they have a mark-up of $1-$2 per dosage?
The basic point is that drugs are cheap to produce. We should want them to be cheap to buy also. We just need another mechanism to pay for the research. The abuses of the patent system have cost both money and lives.
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