E-drug: Re: US compulsory licensing proposal for medicines (contd)
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I just want to quickly respond to the last two comments from Mr. Scholtz
and Dr. Urquhart. Yes, pharmaceutical R&D can be a high-risk business,
for small firms. But as a little Econ 102 will tell you, risks may be
hedged. You can see this hedging happening in the ever increasing
consolidation in the industry. The larger the firm grows, the more losses
from failed R&D projects become marginalized with respect to the increase
in "blockbuster" drugs.
I also do not care to see people labeling anything that does not correspond
with free markets (i.e. capitalism) as socialist. If that line of logic
were to be followed, then the patent system is also socialist. Patents are
non-market interventions intended to promote the public welfare. When we
see situations such as in sub-Saharan Africa where there is a great demand
for HIV/AIDS treatments (which is what I think most of the e-drug
"socialists" have in mind) but the demand is not being met because of the
high prices due to the patent system, then there is clearly something
wrong. While I would never support abolishing patents altogether, a
balance must be found between innovation and dissemination.
David Veazey
Dept. of Economics
Fordham University
New York, NY
veazey@fordham.edu
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