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Home Publications Blogs Beat the Press We Don't Need Patent Monopolies to Finance Vaccine Research

We Don't Need Patent Monopolies to Finance Vaccine Research

Thursday, 03 July 2014 04:19

It is amazing that a lengthy piece in the NYT discussing the high cost of new vaccines and the efforts of companies to promote them never discussed the possibility of alternatives to patent monopolies as a way to finance the research. Until recent years, most vaccines actually were developed with public funding, so obviously it is possible.

If the research were paid with public funding, then vaccines would be cheap since they would all be generics. And, there would not be a problem with companies misrepresenting their safety and effectiveness. Monopoly profits give companies an incentive to lie, a fact that economists generally recognize in other circumstances.

The impact of misleading promotion campaigns is especially important in the case of vaccines. Many vaccines are required for allowing children into school. In other words, the government will arrest parents who don't pay companies their monopoly profits on these vaccines. And in the loon tune land of modern economics, this is called a free market outcome.   

Comments (7)Add Comment
Futurists Predict Vaccines to Make a Comeback with Global Warming
written by Last Mover, July 03, 2014 6:07

Remember polio? Remember Jonas Salk who discovered the vaccine necessary to tame such a widespread plague of crippling disease? Of course no one remembers do they. Sixty years ago in America when government actually worked is ancient history isn't it.

Vaccines have dropped to the bottom rung of priority for Big Pharma because they just can't crank out the obscene monopoly economic rent profit like the other wonder drugs can they.

You want vaccines America? Then stop your whining and pay for them like other essential drugs sold to you under economic ransom. What, you want them for free, paid for with taxes like in the old days when polio was seen as a common enemy?

Don't you realize those days are over, replaced by highly specific personalized drugs tailored to each individual? In economics this is known as the good crowding out the bad, or more accurately in economic predator terms, replacing highly efficient low cost vaccines that wipe out disease with obscenely priced carefully marketed drugs to extract every available dollar from customers who can afford them.

But not to worry America. Global warming will change things as infectious disease makes a comeback bigtime. Vaccines will flow freely once again as other highly efficient public services already do based on scale economies. But in this case you will get to keep the gains instead of having them confiscated by the predators.

Why? Because infectious diseases will be elevated to the status of a threat to national security, and anyone knows what that means don't they. Big government will take over the rescue of Americans like it does in other countries with emergency aid provided in disasters.

Move over Big Pharma. You have met your match. Government giveth power and government taketh it away, and it's time to use another crisis besides war to take back some power in the other direction. As Bush II would say about global warming, bring it on. We have a coalition of the willing to defeat you.
written by djb, July 03, 2014 6:33
And i am sure john Cochrane will find a convoluted proof that the opposite is true...that patents are wonderful and benefit everyone

Just like today in wall street journal he has "proven" that there is no multiplier and stimulus doesn't work
Merchants of Death
written by John Parks, July 03, 2014 7:45
Pay until it hurts, then you die. The game is rigged and it is all perfectly legal. These predators in sheep's clothing are not only supported by our government, they are promoted in the name of free trade agreements.
Peru is just now learning this.

am i ok?
written by Dave, July 03, 2014 9:54
do people hate me?
Life and Death
written by Ellis, July 03, 2014 10:16
This is just one more example of the kind of blackmail and gangster tactics that businesses use to gain a profit. Providing decent health care to the population should be simple and straight forward. But it never will be, as long as it is controlled for profit. And looking to the government, to Obama, to the Democrats (or Republicans) to rectify the situation is like looking to a bunch of arsonists to put out a fire.

The problems are much deeper and more systemic than liberal economists are willing to admit.
written by JDM, July 03, 2014 11:52
Not only would these drugs be generics, there could, and should, be a royalty paid to the goverment (aka, us). This would easily produce all the money needed for medical research and probably more.
This is sarcastic, right?
written by c1ue, July 05, 2014 2:22
Global warming plays no role in infectious diseases worldwide. It is the availability of drugs and preventative measures - of which vaccines are a part - which control the spread and incidence of disease.

Oh, and low cost energy is a huge factor as well: high cost energy drives up the base cost of production as energy plays a huge role in the production process.

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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.