Saturday, November 22, 2003

Who'se more socialist on drug company policy?

I want to add a little note to Steven Den Beste's essay on drug research and prices. Oddly enough, in many cases the expensive drug approval process is actually an incentive to research new drugs in the United States. It is not difficult for other drug companies to come out with generic drugs similar to a new discovery but just different enough to be patentable - but if they don't learn about a successful drug until the originator starts selling it, they can't even begin their long involved testing process.

Of course it's true about people in Canada and other countries benefitting from drug research which is only profitable because of the situation in the United States, but we should be clear on what we are doing. Of course patent law was originally designed to encourage innovation, but even if you don't consider it a subsidy as currently interpreted our FDA testing procedure is - for some drugs - although as Den Beste reminds us it's a disincentive for others. Overall, the drug industry which fought the laws initially seems to like them now.

In a sense they are free riders, since they benefit from something for which we pay the costs, but in some ways the situation is better described but our having a sort of subsidy than their taking stuff.

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