Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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NYTimes finds more IP news but doesn't report its consumer cost

The New York Times now carries a lot of stories that are of interest to anyone concerned about the high cost of intellectual property protection. The first story today is a debate over who is right AARP or the industry. AARP says the cost of branded drugs rose 8.3% in 2009 link here. Last year the industry complained that the figure was based on wholesale prices, not the retail prices consumers actually paid. Responding to that criticism, AARP switched to retail and still got a big increase. The industry countered that they should use the consumer price index figure which includes generic drug prices--which showed a much lower price increase and argues that the US has the lowest prices for generics in the world.

Of course, all of this back and forth is irrelevant; the high prices for the branded drugs reflect the monopoly that drug patents give the companies a fact never mentioned in the Times story. That monopoly power allows the companies to raise prices at a time when the economy is in recession and other prices are barely rising. It is also a time when many are unemployed and have a harder time making ends meet; particularly if they are ill and require those drugs.

The other story relates to e-books and a quarrel between Random House, the publisher and the Wylie literary agency link here. The quarrel began because Wylie started publishing e-book versions of 13 classics, previously published in hard copy by Random House. Because e-books are newer than the publisher's contracts with the authors and not always covered by its terms, Wylie felt free to enter the e-book business in them. Random countered by refusing to deal with Wylie in future. The two sides have now agreed, with Wylie ceasing to distribute the 13 e-books. No other terms were published.

Send not to know who pays. Clearly it is we consumers and copyright once again loses its reason for being as an inducement to innovate. These books have long been in existence and can have little to do with the incentive to write more for aging, moribund, or dead authors, given that copyright extends for the life of the author plus 70 years.


If I may ask a very simple question.

What would you do to encourage the "invention" of new and efficacious drugs that does not rely upon the current system associated with patent law?

To start with, shift the cost burden of later-stage clinical trials to the FDA and taxpayers.
A couple of things can be done to encourage phamaceutical development without creating a monopoly. 1. Set up a contest and award prizes for success. 2. Secrecy works as it takes a developer a long time to develop a new drug and still more time to get government approval to market it.
Enabling people to set up contests or awards of prizes is what I hope my Contingency Market can do.

The important thing to note is that these contests can be organised and funded by the people interested in the winners. Neither government nor corporations need to get involved.

If you have a million people interested in a cure for a disease (instead of a cartel of corporations interested in selling patented palliatives and repressing cures), then there's no reason why they can't each contribute a share of a prize - awarded contingent upon delivery to the public of a cure.

Hey there, thank you for the heads up, will spread the word. Maplin onsale now

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