Dean Baker: Breaking the Patent Monopolies, How to Lower the Price of Prescription Drugs

[Better Believe It]

June 2, 2011

Breaking the Patent Monopolies
How to Lower the Price of Prescription Drugs
By DEAN BAKER

Drugs are cheap. There are few drugs that would sell for more than $5-$10 a prescription in a free market. However, many drugs in the United States sell for hundreds of dollar per prescription and sometimes several thousand dollars per prescription. There is a simple reason for this fact: government-granted patent monopolies.

The government gives patent monopolies to provide an incentive for drug companies to carry through research. This is an incredibly backward and inefficient way to pay for research. It leaves us paying huge amounts of money for cheap drugs. It also often leads to bad medicine.

We can do better and Senator Bernie Sanders has proposed a way. He has introduced a bill to create a prize fund that would buy up patents, so that drugs could then be sold at their free market price. Sanders' bill would appropriate 0.55 percent of GDP (about $80 billion a year, with the economy's current size) for buying up patents, which would then be placed in the public domain so that any manufacturer could use them at no cost.

This money would come from a tax on public and private insurers. The savings from lower-cost drugs would immediately repay more than 100 percent of the tax.

Read the full article at:

http://www.counterpunch.org/baker06022011.html

[Donnachaidh]

1. kick and Rec! n/t

[RKP5637]

2. K&R

[Uncle Joe]

3. Kicked and recommended.

Thanks for the thread, Better Believe It.

[ProSense]

4. "The Sanders prize fund is not the only possible alternative

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The Sanders prize fund is not the only possible alternative to patents for supporting research on prescription drugs. We could also go the route of direct upfront government funding where the government would contract for the research in advance. We already spend more than $30 billion a year on such research through the National Institutes of Health. This is widely viewed by health experts as money very well spent.

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President Obama proposed direct funding of research.