Prizes, Not Patents

The pharmaceutical industry relies on patent protection for profits and claims to reinvest those profits into more research for medicines that save lives. But the system has an inherent flaw when people with infectious diseases cannot afford the life-saving drugs and companies focus most effort on the health woes of the wealthiest who can afford treatment. Economist Joseph Stiglitz recommends an alternative approach: governments setting priorities by offering prizes for researchers and firms in addition to patents. “With better-directed incentives (more research dollars spent on more important diseases, less money spent on wasteful and distorted marketing), we could have better health at lower cost,” writes Stiglitz for Project Syndicate. The health-care market has many distortions, the economist cautions, so ordinary economic theories of pricing and distribution do not provide maximum benefits. And economic gains for a few could be meaningless as infectious diseases spread. – YaleGlobal