[svara]

You spend billions to get a drug from concept to approval - and then once you've invested all that money, someone else can just sell it too, free loading on all the studies you ran? Why would anyone invest in drug studies?

I need a bit more depth and detail to believe that this doesn't destroy the pharma industry.

What would the empirical evidence even look like? It's not like the modern pharma industry existed before patents.

[alzamos]

The book goes into quite a bit of depth if it is a topic that interests you.

I would flag that we’re getting into “prove a negative” territory here: the goalpost is that we need to prove empirically that patents achieve the desired outcome. If the scenario you describe accounts for all game-theory/incentive/complex-adaptive-system universes, we should see this reflected in the data.

When it comes to pharmaceuticals, they looked into Italy and Switzerland who switched to a patent system in 1978 (and I believe Portugal in the 1990s). They looked at the growth curves of things like # of inventions, total factor productivity, percentage R&D spending, and the conclusion was that there was no statistically significant change in trajectory that would suggest the introduction of the patents had any positive effects. (Edit: they accounted for domestic/international + US filings before/after as well).

[arcticfox]

I think the "prove a negative" idea is a bit silly, my common sense says that the patent system should work better so if it doesn't, somebody's going to have to extensively prove it to me or show me a clear mechanism as to why it doesn't.

I could read a book on it but Italy/Switzerland (combined ~5-10% of drug discovery) making changes 60 years ago doesn't get me too excited about updating my priors.

[Kim_Bruning]

My intuition is the opposite. My favorite example is the patent situation around flight in the 1910's, which ensured that the USA entered WWI without its own fighter aircraft industry. The US actually ended up buying french machines.

[svara]

Thanks for actually giving a great answer to this versus the other knee-jerk comments! I will definitely look into this more.

I think it's important to note that the cost of bringing a drug to market has increased a lot (about threefold) since 1990, so if the case studies are that old they might not generalize.

[alzamos]

Of course! Happy you found it useful.

You’ll have to forgive me if my answer isn’t super satisfying - it’s possible, but I’d want to see patents under these conditions empirically validated.

Some things you might find interesting - the author(s) make various arguments such as:

1) Ranking (by various metrics/criteria) the most impactful medicines and making the case that the ones developed independently from patents are both over represented and more impactful. (There was some stuff around what kind of medicines are incentivised with each regime)

2) I don’t exactly remember what they say about R&D costs increasing with time (aside from (1)-style skepticism), but they did talk how as time went on, logistics/distribution/marketing technology has grown immeasurably, so the window one has before the copycats come in can be exploited with a lot more gusto.

3) Reverse engineering of medicines + especially their industrialisation takes longer (and requires more capital) than people think, and there’s a bit of a conundrum where, because you don’t know which medicines will be commercially successful, you have to wait to see how they perform on the market… but the longer you wait, the more (2) happens (and the more you have to fight first mover advantage, established marketing etc)

The points are more rigorously covered in the book - (2)+(3) had papers that quantified the stated effects in question.

I will stress again though that while the “counter-narratives” are interesting and may help build some intuition, I would set the gold standard to some econometric/shock-analysis of patents in action.

[thinkingtoilet]

> Why would anyone invest in drug studies?

To make a shit ton of money. These things are insanely profitable. Generics exist and they're still profitable. You can get 99% of drugs from over seas and they're still profitable. These companies make trillions of dollars over the years. Yes, they might make slightly less money, but they still would be making a shit ton of money.

[svara]

Generics exist for drugs that usually someone did hold a patent for that has since expired and they're much less profitable than patented drugs.

Not sure how that address the point. Again, the investment to get a drug to market is gigantic and you're saying that someone should pay for that and someone else should get the reward. It really doesn't work that way. Everyone would want to be the one who didn't pay.

[ajam1507]

Who is going to invest in your company when they could invest in the company that just makes the drugs you invent without the overhead of R&D?

[wqaatwt]

And why would you manufacture anything but generics?

[thinkingtoilet]

To make a shit ton of money.

[wqaatwt]

How? you would make more money by only manufacturing generic drugs. Investing massive amounts of money to subsidize your competitors would be irrational.

[Buttons840]

> You spend billions

The you being taxpayers, right?

[svara]

No, only a small part of this is publicly funded.

[kingkawn]

Nearly all basic science research is publicly funded, then in the US transferred to the private sector for commercial exploitation

[derektank]

Phase 1/2/3 clinical trials (the kinds of studies that cost tens of millions of dollars) are overwhelmingly funded by private industry.

[paulryanrogers]

Which part is small? Productizing? R&D? Marketing?