Drug Patents?

What do you think would happen to research and development of drugs in the United States if patent lives were much shorter or if no patents were issued at all? How does the protection of intellectual property rights through patents and copyrights encourage economic growth

Answer:
Interesting question, thank you for asking this.

The point of drug patents is that prescription drugs tend to involve a substantial expenditure before they even hit the market, and thus patents allow some time to recoup expenses via monopoly profits. It's not that firms are unable to generate profits on name-brand OTC drugs, but that these profits are often substantially lower because every generic retailer copies the formula and markets their product next to the brand name, often at a substantial discount. At this point, competition requires advertising and often support from prescribers, which may involve kickbacks and rebates to the prescribing doctor.

The plus-side of removing the patent life (or shortening it) is mainly economic efficiency from the standpoint of preventing or reducing monopoly profits. Moreover, because profits would be lower, developers would be encouraged to streamline research, making it more efficient (less wasteful). Thus, total expenditure required (by patients and by manufacturers) may be reduced.

The down-side to removing patent protection may be a reduction in research and development. Not all drugs researched actually pan out to something marketable - and the less likely a drug will be to make profits, the less likely a company is to engage in that line of research. Patents, therefore, by guaranteeing monopoly profits, encourage more risk-taking by companies and more creativity in research; effectively, it reduces the barriers to researching a pharmaceutical. What this translates into in reality is less development on drugs that are not as profitable - such as those primarily utilized in third world nations. These include:
* New antibiotics for resistent strains of TB and MRSA.
* AIDS drugs.
* Anti-parastics.

In other words, drugs that may be integral to the amelioration of crippling poverty (since very sick people cannot work).


Another possible response to patent removal may be increased secrecy of research. A patent is essentially a contract with society - in exchange for 17 years of pure profits for the company, society is then given unfettered access to the formula of the drug (or the blueprints of hte machine, etc.). On highly complicated drugs, this could mean production processes, chemical equations, etc. By circumventing the patent system, it may be entirely possible to put a drug on the market that is nigh impossible for competitors to decipher in terms of chemical composition. An example of this type of de facto "patent" protection is that of Zildjian cymbals. These cymbals are made using a process known only to Mr. Zildjian and his son, Sabian (who decided to start his own cymbal manufacturing).

Of course, if all pharmaceuticals were to use such complicated processes, there'd be no need to resort to the patent system.
clearly the amount of R&D in new drugs will go down.
We must decide if that outweighs the bebfit to more people being able to receive the drug

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