Patents - Friend or foe of capitalism?

[heavenlyboy34]

The problem with your statement is that you assume that brand name is the driving force behind sales. I grew up on store brand products, Aldi's and Save a Lot. It's cheaper and is just as effective.

The problem with using fashion as an example of patent free society is that it is art. And the definition of "art" is so ubiquitous now that I can create art in 2 minutes. I haven't taking an art class since Middle School, but I could learn how to knit in an afternoon and have a garment made up by bedtime. Would it sell, I highly doubt it. But I could wear it and someone else could wear it as well.

Ideas may be free, but new science isn't, whether your in a Communist, Mixed, or anarcho capitalism economy. A company who invest 20 million to develop a new drug will never recoup their losses if someone can create a generic for 5 million.

They also won't recoup the losses if people discover a natural way to do what the drug does. (and this would happen if the FDA was abolished, as constitutionalists say they want) So? As pointed out earlier, the companies should simply find more efficient ways of making drugs instead of using government-enforced monopoly.

ETA: the ideas of chemicals (pharma-drugs) are just as super-abundant as any other example of IP. That's how generics wind up being made after big pharma squeezes out as much "profit" as possible.

ETA 2: drug development wouldn't be as expensive as it is without government regs.

 

[tttppp]

They also won't recoup the losses if people discover a natural way to do what the drug does. (and this would happen if the FDA was abolished, as constitutionalists say they want) So? As pointed out earlier, the companies should simply find more efficient ways of making drugs instead of using government-enforced monopoly.

I agree completely. Also, companies selling herbs have survived for thousands of years. If they can profit without the FDA and without patents, why can't drug companies?

 

[Zippyjuan]

Drugs are actually an excellent example of patents encouraging development and innovation. It can cost millions or even billions to research new drugs and if the company is not able to have some protection for a limited time then a competiting company- who did not face those costs- can put out a copy of their own. Even if their cost of producing is the same, since they don't have the development costs, the competition makes more money off each one than the discoverer does- they only have the production and distribution costs to bear. Again, why go to the expense of researching new drugs if it is going to cost you money you cannot recover? Generics are cheaper precisely because they don't include R&D expenses.

 

[Jovan Galtic]

Again, why go to the expense of researching new drugs if it is going to cost you money you cannot recover?

Whenever you think you are facing a contradiction, check your premises.

 

[heavenlyboy34]

Drugs are actually an excellent example of patents encouraging development and innovation. It can cost millions or even billions to research new drugs and if the company is not able to have some protection for a limited time then a competiting company- who did not face those costs- can put out a copy of their own. Even if their cost of producing is the same, since they don't have the development costs, the competition makes more money off each one than the discoverer does- they only have the production and distribution costs to bear. Again, why go to the expense of researching new drugs if it is going to cost you money you cannot recover? Generics are cheaper precisely because they don't include R&D expenses.

Cutting out competition by creating an artificial monopoly on an idea is not the same as "encouraging development and innovation". Allowing producers to enter the market with minimum difficulty is "encouraging development and innovation". In fact, the fact that a corp can just patent a drug allows them to just sit on it indefinitely while competitors can't compete (and cause prices to drop).

You're right that the process is expensive. Pharma corps should learn to be more cost-effective and competitive rather than turn to the government to protect their "ideas".

 

[Zippyjuan]

Cutting out competition by creating an artificial monopoly on an idea is not the same as "encouraging development and innovation". Allowing producers to enter the market with minimum difficulty is "encouraging development and innovation". In fact, the fact that a corp can just patent a drug allows them to just sit on it indefinitely while competitors can't compete (and cause prices to drop).

You're right that the process is expensive. Pharma corps should learn to be more cost-effective and competitive rather than turn to the government to protect their "ideas".

They can sit on a patent if they want to- sure. But why? Especially given the high cost of drug research. It cost them money and if they aren't using it they are not making money off it and the time limit on the patent is ticking- the clock starts when the patent paperwork is filed, not when it is granted or when they start to produce anything using it. That would mean they wasted the development costs. Patents are for all inventors- not just Big Pharma.

 

[heavenlyboy34]

They can sit on a patent if they want to- sure. But why? Especially given the high cost of drug research. It cost them money and if they aren't using it they are not making money off it and the time limit on the patent is ticking. That would mean they wasted the development costs. Patents are for all inventors- not just Big Pharma.

Same reason publishers sit on copyrights. To stifle innovation. If you can out-wait the competition, you wind up with all or most of the market share. Getting a patent isn't that expensive. (anyone can get one, as you say) Edison racked up more than 10,000 in his lifetime.

 

[Zippyjuan]

Competition can't do anything during the life of the patent anyways whether you use it or not so not using it does nothing really to stifle competition. That actually puts you in the same position as the competition when you could have possibly moved ahead. It is true that the patent process is not that expensive but depending on what you make the R&D associated with the innovation can be- especially with drugs.

Now you could come up with a patent for something your competitor might want- say an oil company buying up one for something to greatly improve the mileage for a car but the car companies will also be looking for other ways to improve them. They are not discouraged from further research themselves.

 

[rpwi]

Now you could come up with a patent for something your competitor might want- say an oil company buying up one for something to greatly improve the mileage for a car but the car companies will also be looking for other ways to improve them. They are not discouraged from further research themselves.

I'm not sure I like that logic... If you are marginalized by an unjust monopoly, you should seek one yourself? If somebody patents irrigation and you are sick of paying high food prices...you should patent the English language? The wheel?

Certainly 'mileage patents' are an interest case study. There recently was a documentary called GasHole that looked largely at this...and it's quite incriminating. The oil companies are definitely sitting on high mileage patents (like ones that increase the surface-area of fuel-vapor and ones that introduce steam with gas-vapor to improve mileage). They definitely work and have dramatic results and it is a crime that they are being suppressed.

It is important to acknowledge that there are cases in which patents do create economic value...and that is for where the patent would not have been invented otherwhise (which is actually quite rare as what holds back most patents are the cost and availability of key materials and dependent technologies). The history of coincidental inventions that nag a large many of history great inventions is quite indicative of this. But all in all, I'm not sure it is worth it. Say we express this all as a formula.

Net economic benefit from patents = +(inventions that wouldn't have been invented otherwise) -(monopoly rent paid on patents awarded on inventions that naturally would have been duplicated) -(derivative inventions on legit patents)

Can you honestly say this is a positive value?

 

[heavenlyboy34]

Competition can't do anything during the life of the patent anyways whether you use it or not so not using it does nothing really to stifle competition.

Actually, it does stifle the competition. The patent life is typically 20 years. That's 20 years of competition and innovation lost.

That actually puts you in the same position as the competition when you could have possibly moved ahead. It is true that the patent process is not that expensive but depending on what you make the R&D associated with the innovation can be- especially with drugs.

Yes, but patent trolls have the same motivation as copyright trolls. It's illogical on the surface, but it is their subjective preference.

Now you could come up with a patent for something your competitor might want- say an oil company buying up one for something to greatly improve the mileage for a car but the car companies will also be looking for other ways to improve them. They are not discouraged from further research themselves.

True, but the competitors cannot use and improve on the existing car technology. This allows patent holders to keep prices artificially high, as was touched on earlier in the thread.

 

[Roy L]

The problem with using fashion as an example of patent free society is that it is art.

It's mainly a business, and one that manages to produce better and better clothes at lower and lower prices. The fraction of household budgets devoted to clothing has fallen by 80% in the last century.

Pharma, by contrast, an industry totally dominated by patents, charges more and more for drugs that are less and less distinguishable from generics -- and that kill many thousands of people every year through patent-profit-driven over-prescription.

HELLO???

And the definition of "art" is so ubiquitous now that I can create art in 2 minutes. I haven't taking an art class since Middle School, but I could learn how to knit in an afternoon and have a garment made up by bedtime. Would it sell, I highly doubt it. But I could wear it and someone else could wear it as well.

Were you under an erroneous impression that you were saying something relevant?

Ideas may be free, but new science isn't, whether your in a Communist, Mixed, or anarcho capitalism economy. A company who invest 20 million to develop a new drug will never recoup their losses if someone can create a generic for 5 million.

Wrong. If their new drug has merit, they can easily make enough to pay for its development by being first into the market. Remember, the generic maker isn't a fool. He is not going to invest the $5M before he sees the market is viable. By that time, the originator has made back his investment.

 

[Roy L]

Drugs are actually an excellent example of patents encouraging development and innovation.

Already refuted.

It can cost millions or even billions to research new drugs and if the company is not able to have some protection for a limited time then a competiting company- who did not face those costs- can put out a copy of their own.

In most cases, those drugs should not be developed. They are often no better than the off-patent generics, so in most cases the drug's development is nothing but a huge, wasteful rent-seeking exercise.

Even if their cost of producing is the same, since they don't have the development costs, the competition makes more money off each one than the discoverer does- they only have the production and distribution costs to bear.

Wrong. R&D is a sunk cost. The generic maker is going to wait until the market is proved profitable, by which time the developer has recouped some or all of that cost.

Again, why go to the expense of researching new drugs if it is going to cost you money you cannot recover?

Because you are smarter than ZJ, and realize that researching new drugs is done by scientists, not businessmen or banksters, and the latter really have very little reason to be involved if they can't make monopoly profits from it.

Generics are cheaper precisely because they don't include R&D expenses.

Garbage. R&D is a sunk cost all round. It's MARKETING that causes the brand-name versions to be so expensive. Generics are cheaper because of COMPETITION.

 

[Knighted]

Chinese traditional medicine has survived 5,000 years without the FDA. With all the regulations out there, western medicine still hasn't caught up with CTM. My guess is the FDA is providing much of a benefit.

China actually produces a much better quality of herbs than the U.S. and other capitalist countries. Because China has the death penalty there, they can't just throw in bogus stuff in their pills and claim its something its not. The acupuncturist I went to only purchased herbs from China for just this reason.

I'm late in replying to this, but the claims you're making above are ridiculous. Was this written in jest? Chinese medicine is the most prominent example of quackery and "faith based" medicine in the world. Here, eat some tiger p*nis to make your more virile! What's the proof? Oh.. there is none. There are two kinds of medicine: evidence based, and not. Traditional chinese medicine is not grounded in science. And to make the claim that western medicine hasn't caught up to Chinese medicine is absurd. Which countries have the longest lifespans and illness survival rates again? Hint: It's not China. As for China having a "death penalty for putting bogus stuff in their pills and claiming it's something it's not" - there is no truth to this whatsoever. Didn't you read what I wrote in my post you quoted about Chinese manufacturers putting powdered baby flesh in capsules and selling it as a cure-all? I'm sorry, but you've been fed a pack of lies by your acupuncturist.

There is medicine that works and medicine that doesn't. Herbal medicine as a whole does not. Virtually all medicine that works is grounded in science and evidence-based studies such as those that the FDA requires be performed, while virtually all herbal medicine is pedaled by charlatans that don't know if their pills work and don't care if they work, because they will be able to sell them either way, and people will genuinely feel they are being helped by such pills even when they aren't, thanks to the placebo effect. The harm that herbal medicine has done to this country in the case of serious illnesses by preventing or delaying people from seeking out science based treatments that work in favor of what amounts to faith healing and voodoo is immeasurable.

 

[tttppp]

I'm late in replying to this, but the claims you're making above are ridiculous. Was this written in jest? Chinese medicine is the most prominent example of quackery and "faith based" medicine in the world. Here, eat some tiger p*nis to make your more virile! What's the proof? Oh.. there is none. There are two kinds of medicine: evidence based, and not. Traditional chinese medicine is not grounded in science. And to make the claim that western medicine hasn't caught up to Chinese medicine is absurd. Which countries have the longest lifespans and illness survival rates again? Hint: It's not China. As for China having a "death penalty for putting bogus stuff in their pills and claiming it's something it's not" - there is no truth to this whatsoever. Didn't you read what I wrote in my post you quoted about Chinese manufacturers putting powdered baby flesh in capsules and selling it as a cure-all? I'm sorry, but you've been fed a pack of lies by your acupuncturist.

There is medicine that works and medicine that doesn't. Herbal medicine as a whole does not. Virtually all medicine that works is grounded in science and evidence-based studies such as those that the FDA requires be performed, while virtually all herbal medicine is pedaled by charlatans that don't know if their pills work and don't care if they work, because they will be able to sell them either way, and people will genuinely feel they are being helped by such pills even when they aren't, thanks to the placebo effect. The harm that herbal medicine has done to this country in the case of serious illnesses by preventing or delaying people from seeking out science based treatments that work in favor of what amounts to faith healing and voodoo is immeasurable.

I generally don't speak about something unless I know what I am talking about. I would suggest you do the same. I've had plenty of experience going to doctors and acupuncturists, I know what each is capable of and how much science is based on it. You don't. For example, an acupuncturist can notice the slightest changes in your condition just by looking at your tongue. Doctors rely on bullshit statistics which tell you things like 25% of the people who took pill x got diabetes or if you have the xyz condition you have a 10% chance of death. Its nothing exact with doctors. Its all based on bullshit statistics as opposed to acupuncturists which are based on fact. Lets not forget, doctors have yet to develop a cure for anything, while acupuncturists have been curing most conditions for 5,000 years.

And CTM has nothing to do with faith. Its 100% based on science.

Exactly how many acupuncturists have you been to? How many practiced CTM? I've been to dozens of doctors. All they ever do is give me the run around and tell me I'm perfectly healthy based on the fact that I'm still alive, and nothing else.

 

[TheBlackPeterSchiff]

Foe no question.

 

[Zippyjuan]

The generic maker is going to wait until the market is proved profitable, by which time the developer has recouped some or all of that cost.

Exactly. The company who develops the original drug takes all the risks and has to pay the expenses for research. The generic maker only has to copy the formula from the original company. The original maker then has 20 years (from the time they file for the patent- not from when they start making the product- if the testing and aproval period takes ten years then they only have ten left to get those costs back) to try to recoup those costs. And without them spending those R&D costs and developing the drug in the first place, the generic companies would have nothing to copy or would have to spend their own money on R&D to come up with their own products.

 

[Roy L]

The company who develops the original drug takes all the risks and has to pay the expenses for research.

Garbage. Almost all drug patents are based on research conducted at the expense of governments, foundations, universities, etc.

And even without patents, the company that develops it gets to market it first, establishing a brand.

The generic maker only has to copy the formula from the original company.

More garbage. It also has to sell it cheaper than competing generics. That is far from easy or guaranteed, so they are also taking risks and shouldering expenses to bring the drug to the market.

The original maker then has 20 years (from the time they file for the patent- not from when they start making the product- if the testing and aproval period takes ten years then they only have ten left to get those costs back) to try to recoup those costs.

Which puts them under pressure to get as many prescriptions for it written as possible in that time, whether or not it is safe, effective, or better than public domain drugs for the same conditions.

And without them spending those R&D costs and developing the drug in the first place, the generic companies would have nothing to copy or would have to spend their own money on R&D to come up with their own products.

You're not paying attention. If all drugs are generic, the only way to get an advantage on competitors or make any money is to produce a new drug they aren't producing yet. Competition will wring out the profits of companies that only copy drugs others have developed.

 

[Knighted]

Garbage. Almost all drug patents are based on research conducted at the expense of governments, foundations, universities, etc.

Really? Pfizer, a single pharmaceutical company recently had $2 billion in R&D expenses. That's just one company alone. While it's true that some drugs are ultimately developed based upon findings from third party funded sources, they aren't simply handing big pharma companies a blank check. There is an incredible amount of research, development, and risk that these companies take on when developing a new drug.

Which puts them under pressure to get as many prescriptions for it written as possible in that time, whether or not it is safe, effective, or better than public domain drugs for the same conditions.

This is where the FDA comes in - requiring that companies prove the efficacy of new medications through rigorous, controlled studies. The FDA requirements aren't perfect by any means, but they are better than the alternative (which would be -no- studies done whatsoever on efficacy, side effects, and drug interactions - see the herbal supplement market for a prime example)

You're not paying attention. If all drugs are generic, the only way to get an advantage on competitors or make any money is to produce a new drug they aren't producing yet. Competition will wring out the profits of companies that only copy drugs others have developed.

Without drug patent laws, companies would be built from the ground up solely to copy the ideas that big pharma firms have invested time/research in and quickly reproduce/mass market them with minimal expense. What do you think would happen to a company like Pfizer, which is currently spending $2 billion a year on R&D costs to develop drugs, if drug patent laws were removed and random company Big China Drug Copiers (BCDC) Inc rolled into America to set up shop? Any new drug that Pfizer spends millions/billions on researching would immediately be duplicated in a lab by BCDC, ridiculously undercut in price to be just barely profitable (BCDC doesn't need much profit margin, since they are only spending a pittance on their own R&D), and thrown onto every shelf in America as the massively cheaper alternative. Sounds great at first, when drug prices sink like a rock, but the future doesn't look so rosy. Pfizer would be losing money hand over fist, and I can guarantee you that their R&D expenditures would dry up practically overnight as new drug development suddenly became a massive money losing proposition. Innovation and new development would grind to a halt, and the new drug market in the US would virtually disappear.

 

[Travlyr]

Without drug patent laws, companies would be built from the ground up solely to copy the ideas that big pharma firms have invested time/research in and quickly reproduce/mass market them with minimal expense.

That's the company I would build.

 

[Roy L]

That's the company I would build.

ROTFL! You'd lose your shirt, because every other economic know-nothing would be doing the same thing. Try to find a willingness to know: you can't get any market advantage that way.