Earlier quoted context omitted.
There have been several historical studies done on the effects of patents on innovation, and the results are mixed. For an example of the "patents may hurt innovation" side, see http://levine.sscnet.ucla.edu/papers/ip.ch.1.m1004.pdf , which argues that the steam engine patents actually held back the development of superior steam engines, reduced the total horsepower deployed, and even distracted Watt (the inventor) f…
Drug development is an interesting case, because the costs aren't associated with the research: they're associated with the safety testing. This has horribly distorting effects.
Don't have patents, have certificates of safety. That way anyone can make a drug, and show consumers that it's been tested safe.