CEPR - Center for Economic and Policy Research
Publications

Multimedia

COLUMNS

Mark Weisbrot,
Co-Director


Dean Baker,
Co-Director

Home Publications Blogs Beat the Press Inefficiency and Corruption: The Predictable Result of Patent Monopolies

Inefficiency and Corruption: The Predictable Result of Patent Monopolies

Print
Tuesday, 17 January 2012 05:53

The NYT reported on a new government regulation that will require drug companies to disclose payments they make to doctors. The reason is to expose potential conflicts of interest that could influence their research, public statements, and prescription writing.

It would be helpful to include some comment from economists on this new regulation. The sort of corruption associated with patent protection for prescription drugs is exactly what economics predicts would result from a system of government-granted monopolies that allow drug companies to sell their product at several thousand percent above the free market price. 

Comments (8)Add Comment
Drugs Could Not Exist Without Patents - Stop Attacks on Private Property
written by izzatzo, January 17, 2012 5:27 AM
Any economist knows an industry with reproducable high fixed costs by others at low marginal cost requires protection of those assets before investing in them lest they are copied and undersold to render an enormous loss to original investors who won't invest otherwise.

As for requiring drug companies to disclose payments to doctors this will suppress essential information used by consumers to make intelligent choices among the many substitutes of available drugs.

Instead the market has already solved this problem with a simple 800 number: 1-800-WHOWROTETHISFORHOWMUCH. Let markets work. Stay out of it.

Stupid liberals.
...
written by bmz, January 17, 2012 7:03 AM
"As for requiring drug companies to disclose payments to doctors this will suppress essential information used by consumers to make intelligent choices among the many substitutes of available drugs."
Spoken like a true Republicon. "Consumers" don't choose drugs; "doctors" do. Liberals understand bribery when they see it. Conservatives/Republicons are either too stupid or dishonest to.
Drug Co. Profits
written by Bart, January 17, 2012 7:28 AM

Big Pharma says they need the patents to recover research costs.

I'd like to see some research results. Are these companies more profitable than most others? Should the patent period be shortened?

Are non-generic drugs cheaper everywhere else? If so, how does that work?

Izzy says "Drugs Could Not Exist Without Patents..."
written by diesel, January 17, 2012 7:41 AM
However, drugs do exist without patents. True, pharmaceutical companies extract, refine, test (sort of) and package them in easily administered doses, but Nature's lab has cooked up a veritable pharmacopia of usable compounds.

"This combined percentage (52% of all NCEs) suggests that natural products are important sources for new drugs and are also good lead compounds suitable for further modification during drug development. The large proportion of natural products in drug discovery has stemmed from the diverse structures and the intricate carbon skeletons of natural products. Since secondary metabolites from natural sources have been elaborated within living systems, they are often perceived as showing more “drug-likeness and biological friendliness than totally synthetic molecules,”3 making them good candidates for further drug development.5,7" from the article Drug Discovery From Natural Sources, Kinghome et al.

Just giving Nature her due and acknowledging that we humans are cells in a larger, living organism with common metabolic functions.
...
written by Kat, January 17, 2012 9:45 AM
Now this does seem like a very useful part of ACA as far as bringing down health care costs by preventing overprescribing.
Who knows what devious way the device makers and pharma will devise to get around it though.
what to do?
written by David, January 17, 2012 9:55 AM
What izzatzo is ironically pointing out is that pharmas do not pay for the fundamental research at public institutions that then supports their (pharmas') own research. So taxpayers pay at both ends: exploratory research on the backend and patent-fueled extortions at the frontend.

"Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune
Or to take arms against a sea of troubles
And by opposing end them? "
--Hamlet
More on what David is saying...
written by Kat, January 17, 2012 11:00 AM
from Marcia Angell. Discusses Contract Research Organizations and academic medical centers:
http://bostonreview.net/BR35.3/angell.php
one a day or one a week=$$$$$$$$$$$$$$$$$$$$$$
written by clarence swinney, January 17, 2012 11:04 AM
One a day pil. go to one a week costs Pharma a 86% loss in Revenue $$$$$$$
Much experience of going to one a week from one a day and improvements
Many friends experience

STOP THIS $$$$$$$ GREED STOP IT

ONE A WEEK IS SUFFICIENT IN MOST CASES

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

Support this blog, donate
pledge-to-beat-the-press-sm

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.

Archives