Posted on 12/26/2006 10:33:36 AM PST by A. Pole
At Christmas, we traditionally retell Dickens's story of Scrooge, who cared more for money than for his fellow human beings. What would we think of a Scrooge who could cure diseases that blighted thousands of people's lives but did not do so? Clearly, we would be horrified. But this has increasingly been happening in the name of economics, under the innocent sounding guise of "intellectual property rights."
Intellectual property differs from other property—restricting its use is inefficient as it costs nothing for another person to use it. Thomas Jefferson, America's third president, put it more poetically than modern economists (who refer to "zero marginal costs" and "non-rivalrous consumption") when he said that knowledge is like a candle, when one candle lights another it does not diminish from the light of the first. Using knowledge to help someone does not prevent that knowledge from helping others. Intellectual property rights, however, enable one person or company to have exclusive control of the use of a particular piece of knowledge, thereby creating monopoly power. Monopolies distort the economy. Restricting the use of medical knowledge not only affects economic efficiency, but also life itself.
We tolerate such restrictions in the belief that they might spur innovation, balancing costs against benefits. But the costs of restrictions can outweigh the benefits. It is hard to see how the patent issued by the US government for the healing properties of turmeric, which had been known for hundreds of years, stimulated research. Had the patent been enforced in India, poor people who wanted to use this compound would have had to pay royalties to the United States.
In 1995 the Uruguay round trade negotiations concluded in the establishment of the World Trade Organization, which imposed US style intellectual property rights around the world. These rights were intended to reduce access to generic medicines and they succeeded. As generic medicines cost a fraction of their brand name counterparts, billions could no longer afford the drugs they needed. For example, a year's treatment with a generic cocktail of AIDS drugs might cost $130 (£65; 
170) compared with $10 000 for the brand name version.1 Billions of people living on $2-3 a day cannot afford $10 000, though they might be able to scrape together enough for the generic drugs. And matters are getting worse. New drug regimens recommended by the World Health Organization and second line defences that need to be used as resistance to standard treatments develops can cost much more.
Developing countries paid a high price for this agreement. But what have they received in return? Drug companies spend more on advertising and marketing than on research, more on research on lifestyle drugs than on life saving drugs, and almost nothing on diseases that affect developing countries only. This is not surprising. Poor people cannot afford drugs, and drug companies make investments that yield the highest returns. The chief executive of Novartis, a drug company with a history of social responsibility, said "We have no model which would [meet] the need for new drugs in a sustainable way ... You can't expect for-profit organizations to do this on a large scale."2
Research needs money, but the current system results in limited funds being spent in the wrong way. For instance, the human genome project decoded the human genome within the target timeframe, but a few scientists managed to beat the project so they could patent genes related to breast cancer. The social value of gaining this knowledge slightly earlier was small, but the cost was enormous. Consequently the cost of testing for breast cancer vulnerability genes is high. In countries with no national health service many women with these genes will fail to be tested. In counties where governments will pay for these tests less money will be available for other public health needs.
A medical prize fund provides an alternative. Such a fund would give large rewards for cures or vaccines for diseases like malaria that affect millions, and smaller rewards for drugs that are similar to existing ones, with perhaps slightly different side effects. The intellectual property would be available to generic drug companies. The power of competitive markets would ensure a wide distribution at the lowest possible price, unlike the current system, which uses monopoly power, with its high prices and limited usage.
The prizes could be funded by governments in advanced industrial countries. For diseases that affect the developed world, governments are already paying as part of the health care they provide for their citizens. For diseases that affect developing countries, the funding could be part of development assistance. Money spent in this way might do as much to improve the wellbeing of people in the developing world—and even their productivity—as any other that they are given.
The medical prize fund could be one of several ways to promote innovation in crucial diseases. The most important ideas that emerge from basic science have never been protected by patents and never should be. Most researchers are motivated by the desire to enhance understanding and help humankind. Of course money is needed, and governments must continue to provide money through research grants along with support for government research laboratories and research universities. The patent system would continue to play a part for applications for which no one offers a prize . The prize fund should complement these other methods of funding; it at least holds the promise that in the future more money will be spent on research than on advertising and marketing of drugs, and that research concentrates on diseases that matter. Importantly, the medical prize fund would ensure that we make the best possible use of whatever knowledge we acquire, rather than hoarding it and limiting usage to those who can afford it, as Scrooge might have done. It is a thought we should keep in mind this Christmas.3 4 5 6
Populist/collectivist baboonery. FTB. ["T" stands for "the" or "them"].
Quote from Jefferson by a Nobel prize-winning economist Joseph Stiglitz (who was fired by the World Bank)
Couldn't read past "we tolerate intellectual property rights". Only from socialist Britain could such silly drivel emerge.
In before the old grouchy technical types that had to assign "their" patent rights to the company that wrote their checks and paid for the research equipment.
That is normally covered in their employment agreement. As soon as they put their signatures on that dotted line, that's it.
That's not going to stop them from bitching about it.
I wonder if Joseph E Stiglitz would mind if I sold some books falsely using his name.
Heck, just re-print his articls as your own, he won't care.
Well, as soon as one signs, one signs off their rights to bitch. In my former workplace they used to pay the patent awardees $1 a nose - a purely symbolic payment. The most one could honorably do in the bitching line would be to mention inflation and demand $ 1.25.
Could be and would be. And governments would decide who gets the money.
It is unfortunate that my colleagues in the research racket cannot see how anything could ever happen without government funding.
That said, I am not opposed to the idea of awarding prizes for innovation. It might be an attractive alternative to the current system of government research funding.
However, prizes would not not address the problems associated with other kinds of intellectual property. If I write a popular book, should I depend on the government to reward me with a prize?
Total socialist drivel, but it does touch on a few true points. Our system of "IP" is in fact based on benefit to society. Enrichment of creators is not an end in itself, but only a means to benefit society through incentive to produce scientific and artistic works.
Yes, our Constitution in a sense has a bit of socialist sentiment in it. "Intellectual property" is a misnomer, because there is no real property, only a granted limited monopoly right (not a natural or God-given right) that can be bought and sold as property.
However, in their wisdom, the Founders attempted to achieve a balance. Yes, monopolies are generally bad, but the idea was that the incentive a short-term monopoly gives outweighs the bad. Unfortunately, our current laws governing "IP" blow the balance way off center, away from society and towards the creators.
And I do say this as a holder of registered copyrights.
It's a good idea, and it worked in the private sector. Just look at the Ansari X-Prize, and Burt Rutan getting a guy into space on an entire R&D and lauch cost that was a fraction of the cost of one NASA launch.
I thought this was going to address the notion of fair use and public domain. Works like Dicken's "A Christmas Carol" are popularly adapted because they ARE in the public domain.
Certainly the text is of no use to Charles Dickens these days.
But now corporate interests have postponed the inevitable lapse of copyright outward to 100 years (or more).
Patents lapse too.
A cure requires expensive research. Should a return on that investment be expected? Or should squaters be allowed to wait in the wings, contributing nothing, and reap the rewards on someone else's hard work from day ONE?
I say let Bill Gates and other top billionaires sponsor it.
Or make oil wealthy third world nations pay for it (why only industrialized nations?). Certainly the Middle East (home to 5 of the world's 10 wealthiest men) doesn't trickle the money down to their citizens. Why should we have the West pay for it just because our citizens have a smaller disparity between the wealthy and the poor?
Many in the entertainment industry used to get paid as "work for hire".
The technical industries need to reward those that "get it done" more. Bill Gates does not have a billion dollar brain. He does not have vast insights. He has a talented staff. Agreed they are free to work elsewhere but the compensation in the industry is unjust.
In some industries (including the comic book industry) the courts have determined that the creators were undercompensated and at time of copyright renewal, they were allowed to challenge the corporations to regain ownership of their creations.
Corporate is, IIRC, 95 years. What's bad is life plus 70 for personal copyrights. If you write something at 20 and die at 100, that's a copyright term of 150 years -- totally ridiculous.
A cure requires expensive research. Should a return on that investment be expected?
Definitely. Merck deserves to reap billions in net profit for Gardasil (HPV vaccine, prevents most cervical cancer). Unfortunately, the drug companies have a habit of making a trivial change to a drug and then patenting that change in order to effectively extend the original patent. Society paid them by giving them a limited monopoly, but they don't want to uphold their end of the bargain. They want that monopoly forever.
On a slight tangent, the drug companies keep us from getting cheap foreign drugs. The reason is that the drug companies sell in socialist countries that put a cap on what the drug companies can charge for drugs. They charge us more here to make up the difference and write laws so we can't go get the cheap foreign version. This in effect has us subsidizing socialist health care systems around the world. I say screw the socialists and charge them fair market price if they want the drugs at all.
To the author: Okay, you Marxist buffoon. If society, specifically your government, or the governments of the world, feel that it is so important to give this intellectual property away without getting any compensation for it, you should pay a fair price, say 200 billion per patent beyond development costs, and buy the damned things from the patent holders. Then it's your intellectual property you'll be giving away, not someone elses.
Of course, don't use any of my tax dollars to do it. Use some of the money that wealthy Doctors receive and use to buy themselves golf club memberships and BMWs (working doctors who don't make those outrageous fees would be exempt). Slap a special tax on the proceeds gained by tort lawyers from contingency fees in malpractice suits (not the victims, the lawyers) and on all such fees in class action suits beyond, say $50/hour "normal and customary" legal fees. Best idea of all, put a 150% tax on all income derived from anything to do with abortions and use that money. All of those things would not only give you the funds to pay the intellectual property holders a fair return for their investment (and genius) but would also provide a disincentive for all of the listed activities which are far more morally repugnant than scientists and the companies that employ actually making money from their labor.
Off topic a bit.
I couldn't get pass this:
"Dickens's story of Scrooge, who cared more for money than for his fellow human beings"
If anyone actually read and understood the ending of the story, Scrooge lived the rest of his life and celebrated the true meaning of Christmas as none had ever done before or since. (Paraphrasing on my part)
Scrooge eternally has gotten a bum rap.
There is a way to fix that; any IP that is not in use within a certain [two][five] year time-span reverts back to public use.
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