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Stfoskey15's thread on How long should copyrights last? got me thinking about patents for pharmaceutical drugs.
Various recent international trade agreements like the TPP have toyed with the idea of increasing the length of patents on pharmaceutical drugs, the idea being that pharmaceutical companies need to get a good "return on investment" to incentivise further R&D. i.e. They won't spend heaps of money inventing great new drugs if they can't sell them at huge profits after they invent them.
So currently governments grant the pharmaceutical companies a period (7-20 years or so depending on country) after the invention of the drug where they can sell it at whatever price they like, to recoup their R&D costs, and nobody else is allowed to sell the drug. After that, all bets are off, and anyone who feels like manufacturing the drug for 1c per pill in India is allowed to do so (typically the actual costs of manufacturing the drug are tiny) and can sell and distribute it at cost+profits.
It's worth noting that in the US, pharmaceutical companies are currently the most profitable industry (even more than banks) and are the biggest donors to politicians (even more than banks). Their marketing expenses are notoriously high, as they spend much of their money convincing doctors to prescribe the drugs they currently have under patent.
So when I started thinking about how long pharmaceutical patents should be, I looked up what the total R&D spending is, with a view to thinking about how long they would need in patents to recoup that investment...
...and found that global pharmaceutical R&D spending is only ~$160B US!
That is tiny: Less than 5% of the US federal budget; Around a third of the $450B spent per year in the US on prescription drugs; About what the US government itself currently spends per year buying prescription drugs through Medicare+Medicaid.
So the US government could easily, using the money it already spends on drugs, fund the entire world's R&D budget for pharmaceuticals, and once a drug has been discovered allow anyone to manufacture it and sell it at cost (1c each or whatever). Or better still, the UN could agree for all countries to spend 1% of their federal budget on pharmaceutical R&D. Or in international trade agreements the terms could be "you agree to spend 2% of your budget on pharmaceutical R&D and in exchange all drugs discovered in each of our countries are patent-free within our countries".
Various recent international trade agreements like the TPP have toyed with the idea of increasing the length of patents on pharmaceutical drugs, the idea being that pharmaceutical companies need to get a good "return on investment" to incentivise further R&D. i.e. They won't spend heaps of money inventing great new drugs if they can't sell them at huge profits after they invent them.
So currently governments grant the pharmaceutical companies a period (7-20 years or so depending on country) after the invention of the drug where they can sell it at whatever price they like, to recoup their R&D costs, and nobody else is allowed to sell the drug. After that, all bets are off, and anyone who feels like manufacturing the drug for 1c per pill in India is allowed to do so (typically the actual costs of manufacturing the drug are tiny) and can sell and distribute it at cost+profits.
It's worth noting that in the US, pharmaceutical companies are currently the most profitable industry (even more than banks) and are the biggest donors to politicians (even more than banks). Their marketing expenses are notoriously high, as they spend much of their money convincing doctors to prescribe the drugs they currently have under patent.
So when I started thinking about how long pharmaceutical patents should be, I looked up what the total R&D spending is, with a view to thinking about how long they would need in patents to recoup that investment...
...and found that global pharmaceutical R&D spending is only ~$160B US!
That is tiny: Less than 5% of the US federal budget; Around a third of the $450B spent per year in the US on prescription drugs; About what the US government itself currently spends per year buying prescription drugs through Medicare+Medicaid.
So the US government could easily, using the money it already spends on drugs, fund the entire world's R&D budget for pharmaceuticals, and once a drug has been discovered allow anyone to manufacture it and sell it at cost (1c each or whatever). Or better still, the UN could agree for all countries to spend 1% of their federal budget on pharmaceutical R&D. Or in international trade agreements the terms could be "you agree to spend 2% of your budget on pharmaceutical R&D and in exchange all drugs discovered in each of our countries are patent-free within our countries".
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