[DennisP]

So the problem is that healthcare innovation is a public good, which like all public goods is underprovisioned if you don't take steps. We approached this one by converting it to a private good within the U.S. But that's not the only solution.

A natural entity to pay for drug development is health insurance companies, who would save a lot of money if drugs were patent-free. But they don't in fact fund patent-free drugs, since their competitors could free-load.

Bernie Sanders proposed a solution: tax the insurers so none can freeload, and use the money for drug development, and keep everything patent-free. The insurers could come out ahead. (Iirc he had a slightly more complex arrangement that didn't require the government to decide who would be funded.)

It's worth noting that patents don't only reward inventors, they also increase their costs. The book The Gridlock Economy talks about this, and mentions one biotech firm that thought it had a cure for Alzheimer's. It infringed on thirty patents, and each patent-holder thought it had the most important part and charged accordingly. They had to abandon the whole thing.

[amalag]

Having the government fund patent-free drug development is a very interesting approach. Is the idea to do through proposals like Darpa?

[betterunix]

I would support such a system. In my ideal world, things look like this:

NIH pays for the research and development of new drugs, and we do not give out patents for any of it. Pharmaceutical companies are free to produce whatever drugs they want, and cannot prevent anyone else from producing those drugs; they must only meet the quality control standards set by the FDA. All drugs would be sold like today's "generics," in a competitive market that keeps prices down.