September 10, 2023
Peter Coy had an interesting column last week on saving money on health care. The piece focused on an interview with James and Robert Rebitzer and discussed ways to reduce the cost of treating patients, especially the cost of prescription drugs.
At the end of the discussion, the piece mentions the idea of buying out patents and then placing them in the public domain so that they can be sold as cheap generics. While this would solve the problem of high drug prices, there is a step further that could be taken.
The government doesn’t have to give out the patent monopoly in the first place. Instead of paying companies to innovate by giving them patent monopolies, it can just pay for the research upfront as it did when it paid Moderna to develop a COVID-19 vaccine. (Unfortunately, it also then gave Moderna control over the vaccine, creating at least five Moderna billionaires. Ever wonder why we have so much inequality?)
The government already spends more than $50 billion a year funding biomedical research through the National Institutes of Health and other government agencies. It can triple this sum, thereby replacing patent monopoly-supported research. As a condition of getting the funding, researchers would be required to post all findings on the web as soon as practical and all patents would be placed in the public domain, so that everything could be produced as a cheap generic as soon as it was approved.
This would mean new drugs would be cheap and eliminate the enormous incentive for corruption created by government-granted patent monopolies. But, it would create fewer billionaires, so apparently it is not on anyone’s agenda.
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