Release the Drug Patents

Dean Baker:

Drugs are expensive to develop, but once they have been developed the cost of producing another dose is almost always very low. In the economists’ dream world, cancer drugs would sell at their cheap marginal cost.

Of course we would need an alternative mechanism for financing the research. Such alternatives do exist. We could have direct public funding similar to the $30 billion that we spend each year to finance research at National Institutes of Health. (That funding could even go through private drug companies, as long as all the research was fully public.)

We could also go the route of a patent buyout system, where patents would be purchased by the government and then put in the public domain. This method has been suggested by Nobel Laureate Joe Stiglitz and actually proposed in a bill by Vermont Senator Bernie Sanders. Unfortunately it is difficult to get information on such proposals in Washington.


  1. So you propose to eliminate economic return and expect the same level of innovation? Yeah, that’ll work.

    Here’s a thought – maybe the FDA can work with the drug companies instead of against them? For example, permit off-label drug use in late stage terminal illnesses, and document said use to see if there are benefits? Instead, we have bureaucrats (precursor to death panels?) deciding that helping someone suffer less in their last few days isn’t worth “the risk.”

  2. yes, turn over decisions about the development of life saving drugs to the Political class. What could go wrong?

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