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Home Publications Blogs Beat the Press Can You Say "Patent Monopoly?" Joe Nocera Can't

Can You Say "Patent Monopoly?" Joe Nocera Can't

Friday, 18 July 2014 22:21

Okay, this is really getting pathetic. Yet another piece on drug companies charging hundreds of thousands for drugs (wrongly described as their "cost") which never mentions government granted patent monopolies.

Does the NYT and other media outlets have a ban on discussing patents? Look, we have an incredibly stupid way of financing the research and development of prescription drugs. We don't have to do it this way. Anyone hear of the National Institutes of Health? Just think, if we paid for the research up front these drugs would cost hundreds of dollars instead of hundreds of thousands of dollars. All the information uncovered in their discovery would be immediately available for other researchers to benefit from. And, the drug companies would not have enormous incentive to lie about their safety and effectiveness.

And, we wouldn't have all this absurd handwringing about the tough ethical choices in paying for incredibly expensive drugs. Are reporters and columnists prohibited from raising this question or do they really have so little imagination that they can't even envision an alternative to patent financed research?

Comments (8)Add Comment
Changing the boundaries of debate is difficult...
written by MDZX, July 19, 2014 2:54
...especially when a lot of money is on the line. I think that's the big problem.

The NYT doesn't want to upset a multi-billion dollar industry any more than anyone else does. I'm sure they advertise a lot, after all. I doubt reporters are prohibited from talking about it directly - but the types of reporters that are hired and the editorial directions that are given more than likely lead the public away from new perspectives on such issues.

Anyway, thanks for hammering on about this issue. Maybe one day soon it will make a breakthrough in the public consciousness.
written by djb, July 19, 2014 7:43
The drug company

Claims they have to charge 300,000 per patient per year because they spent 6.5 billion on research for all their drugs.......

And only hand two drugs Including this one approved by fda

Worldwide sales of the other drug is 1 billion dollars

But market capitalization of the company is 22 billion

Something is fishy

Bottom line is i doubt they actually paid for their own research... probably grants from nih....and charitable organizations like cystic fibrosis foundation

The knowledge that ended up with the development the drug came from years of scientific discovery... it belongs to us all

We already have public funding of research leading to development of new drugs.... then because of patent system wall street gets to exploit the situation for profit
The Imagination of Sock Puppets is Determined by Their Reservation Price
written by Last Mover, July 19, 2014 8:45
Are reporters and columnists prohibited from raising this question or do they really have so little imagination that they can't even envision an alternative to patent financed research?

They have the imagination all right. In labor economics is something called the reservation price, the straightforward explanation of how high a wage must be to attract someone to work for it.

Reporters and columnists talk incessantly about reservation labor prices without calling it that. Especially when they want to blame government subsidies combined with lazy hammock huggers for inducing potential workers not to stay in the labor force and look for work.

What they mean is the reservation price for these workers is driven artificially high for those who would otherwise take a job at a lower wage. On the exreme political right which is the norm in some ways, certain foamy mouths with a sneer on their face have no problem openly branding these potential workers as poor, stupid and lazy by choice.

Switch to pharmaceutical drugs and ask the same question. What is the reservation price necessary to induce their creation, production and distribution?

The difference between the obscene prices charged for these drugs and the true economic cost of creation, production and distribution is monoppoly profit in the form of economic rent which in no way is part of the legitimate reservation price for these drugs.

In fact that difference represents precisely a version of the subsides rightwing foamies sneer about daily at reservation prices for labor. It raises the reservation price to very high artificial levels before pharmaceuticals will be supplied at all.

Yet reporters and columnists never make the obvious connection between the two reservation prices, one for labor the other for pharmaceuticals. Specifically they and rightwing foamies never talk about hammock hugging producers of drugs who are poor, stupid and lazy by choice because the meme doesn't fit, given the billions of subsidies received in the form of economic rent extracted.

As Dean Baker repeatly explains, these subsidies result in huge amounts of wasted overwork in the opposite direction for drug producers compared to labor. They create huge incentives to lie and steal on an enormous economic scale in a myriad of ways because the only value they are adding above the true reservation price is for themselves - not the economy

So indeed, reporters and columnists do have quite an imagination when it comes to asking how many ways can labor be required to face a true reservation price/wage, in order not to fall backwards into hammock hugging socialist depravity driven by "subsidies" claimed to pervert incentives to work.

But when it comes to asking the same essential question for big corporate welfare on a massive scale like that driven by abusive patent protection equivalent to Mafia protection rackets from the past, well you know, those inquisitive minds suddenly go conveniently blank and lose their collective memory don't they.

Poor babies. They appear to be affected by reservation prices for journalists set too high by those within the 1% who own them as their sock puppets. They are obviously overworked because they are overpaid above their reservation price, therefore failing to keep their imagination under control when reporting and commenting on labor and the entire middle class of America.

Do support them won't you America? Lobby to have their salaries cut to prevent them from effectvely slouching out of the labor force into those slushy hammocks loaded with monopoly rent profit that adds no journalistic value at all.
every trick in the book
written by Jennifer, July 19, 2014 10:12
(For cystic fibrosis sufferers with no insurance, Vertex provides the drug for free.)

Always an aside in these articles but this is an important way drug companies manipulate the culture. The PR they get by claiming that "everybody who really needs it gets it" far outweighs the cost of the drugs they give away, and it keeps the pressure off from real reform.
written by AlanInAZ, July 19, 2014 10:18
Both the US and EU have organized programs in which government agencies partner with Pharma to pool research. The EU program is called Innovative Medicines Initiative (IMI) and the US program is the Accelerating Medicines Partnership (AMP). Both have elaborate IP policies that I found pretty dense. Perhaps Dean can comment on how the governments have chosen to handle IP in programs that are designed to do what he suggests - put the government at the center of drug research and development.

written by skeptonomist, July 19, 2014 10:28
Apparently the development of these drugs depends on socialized health care. Very few people can afford $300k/year for treatments, or even for insurance that would cover such treatment. There are probably not enough people in the 0.1% who have these rare conditions to justify spending huge amounts on research. The cost has to be spread through an entire state, or the entire nation. Without the possibility of huge payoffs from these exorbitant charges it would be impossible to attract the capital necessary for the research (if we believe Vertex about the cost). Claims that the "free market" is producing these miracle drugs are frequently false. "Personalized" drugs probably will have to be heavily socialized. It will certainly be more efficient just from the point of view of the research to have it centralized in government institutions - why have multiple pharmaceutical companies spending enormous amounts to develop drugs that do the same thing?
written by Luke, July 19, 2014 2:02
Even the normally great Sarah Kliff did her best to rationalize the price of Sovaldi by arguing that the $84,000 cost is "actually a great deal" when compared to the $600,000 cost of a liver transplant that a patient would inevitably face without the drug.

She also framed the issue as being a debate between the experts (health economists) and the non-experts (consumer groups). Of course every single health economist she spoke with felt that the high price was a necessary incentive for blockbuster innovations in the future.

I seriously thought I was reading a WSJ Op-Ed by a big pharma lobbyist. Very disappointing.
Is Sovaldi a Patent Problem?
written by Larry Signor, July 19, 2014 4:52
Prior to sovaldi, triple therapy was the standard treatment with a cure rate of 64-70% and a cost of approximately $190,000.00. Sovaldi has a cure rate exceeding 95% at an approximate cost of $100,000.00. This is a large part of Sarah Kliff's point. Sovaldi is not an improvement, it is a serious innovation and should be treated differently than products that rely on incremental patent manipulation for their monopolies. Some mix of public and private patents (with serious term limitations) would seem to be optimal.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.