I\’ve been deperately trying to get my head around Dean Baker\’s proposals for reducing the costs of pharmaceuticals.
Essentially, as I understand it, do not allow patents on drugs. Instead, pay development costs directly from tax revenue and thus the drugs will be sold at marginal cost, rather than having to bear the costs of their development as well.
This would of course require that the bureaucrats allocating the tax money were wise enough (and unbribable enough) to only fund the good drugs. And central planning has worked so well, hasn\’t it?
But it all becomes clear in this comment he made to one of my questions:
We can also radically reduce the amount of research wasted developing copycat drugs, since there is much less incentive for this research, absent the opportunities to gain patent rents.
So we will reduce the number of copycat drugs. So those drug firms with a successful product will in fact face less competition.
And this is going to reduce the costs of drugs?
Genius, pure genius!