The Case for Abolishing Patents (Yes, All of Them)

Yes patents should be abolished. They are not good for the advancement of mankind as a whole.

> The poster child for strong patent protection is usually the pharmaceutical industry, as drugs are easily copied and can cost upwards of a billion dollars to develop. Here, Boldrin and Levine admit that the government would likely need to step in. But rather than giving companies a legal monopoly over their formulas, the authors suggest we should modify the drug approval process to let makers start recouping their costs faster. They would also set up a prize system to reward companies that invent the new medicines we need.

This strikes me as a really fantastic idea. Actually, I wonder if insurance companies shouldn't offer these prizes regardless of the patent situation. They know intimately well which disorders cost them the most money. They could form a consortium and offer a prize for x amount of money for reducing the cost of treating some disorder by y dollars per patient, where x is guaranteed to be less than the amount of money they will save.

The patent system somehow has morphed from shield to sword.

Protecting inventors is one path toward innovation, but it should be a byproduct of maximizing innovation and not the end state.

If the objective of the patent system is to foster innovation, then it should grant patents only if they are necessary for innovation, i.e., innovation wouldn't reasonably occur otherwise.

Amazon's one-click patent versus drug patents are two good cases. If the patent system didn't exist, is it reasonable to think someone else would come up with a one-click method of shopping? Yes. Drugs, however, often require hundreds of millions of dollars in upfront investment. It is reasonable to think that pharma companies couldn't raise the necessary capital, and therefore invent these drugs, without some protection.

Frequently overlooked -- American companies are huge net-exporters of IP, IP licenses, and IP-protected stuff.

Take the recent Apple/Samsung fiasco, for instance. That's a net cash transfer of over $1B from the South Korean economy to the American economy. Maybe $2B to $3B total when accounting for all the factors.

Is that good? No, it's disgraceful, actually. But good luck convincing American legislators of some abstract far-future benefits to a less regulated world when the short-term result would be a worsening of the trade-deficit, a lowering of American exports, and a lowering of American income and tax yields.

It's a huge factor that's usually overlooked in these discussions -- the United States isn't a closed system.

The "award system" for drug development is full of problems.

Who makes the call as to how much to award? Who decides who the award goes to (very few drugs are develop by one group alone)? Who decides when a drug is actually better than existing treatments?

Insurance companies already reward innovation. When a new drug hits the market, insurance companies collect and review all the data available and decide on how much access they'll provide their customers with. This analysis includes looking at a drug's impact on total cost of care.