John Edwards calls for prizes to replace monopolies as innovation incentive for new drugs
Friday, 15 June 2007
John Edwards, a leading candidate for the democratic nomination for president of the United States, has issued a statement endorsing prizes as an "alternative to patent monopolies" for new drugs and other inventions. This was from the Edwards campaign press release:
Improving the Patent System and the FDA: The patent system sometimes encourages greater investment in profitable but minor innovation ("me-too drugs") than in the costly and speculative research that generates true breakthroughs. In 2005, only 20 percent of FDA approved drugs were new molecular entities. In addition, the patent system gives companies long-term monopolies that can make life-saving drugs prohibitively costly for patients. Edwards will convene an expert panel to explore whether there are certain key disorders where prizes for breakthroughs – as an alternative to patent monopolies—would offer new incentives to researchers, guaranteed gains to companies, and lower costs to patients. Prizes would supplement, but not replace, the current patent system. Additionally, Edwards will eliminate loopholes and trade obstacles that block generic drugs and let the FDA approve biogenerics, saving up to $43 billion over 10 years. [Woolley, 2006; Stiglitz, 2005; CAGW, 2007]
This was from the longer Edwards "fact sheet" on health care reforms:
Pursue Prizes as Innovation Incentives: Edwards will convene an expert panel to identify whether there are discoveries where prizes – not patent monopolies—would offer new incentives to researchers, guaranteed gains to companies, and lower costs to patients. Drug companies would know that if they generated a life-saving breakthrough, they would be guaranteed a significant payment in exchange for allowing competition in manufacturing and distribution. With prizes, the government will pay more up front, but it will save taxpayers in the end because companies will generate breakthrough drugs more quickly and provide it to patients at a lower cost. Key questions about the pricing of prizes, the appropriateness of prizes for different diseases, and the relationship to patent protections remain to be resolved, but prizes are a promising innovation that Edwards will pursue.88
88 S. Woolley. “Prizes Not Patents.” Forbes, (April 18, 2006); J. Stiglitz. “Prizes, Not Patents.” Project Syndicate (2007), http://www.project-syndicate.org/commentary/stiglitz81; Consumer Project on Technology. “Medical Prize Innovation Fund.” (2007), http://www.cptech.org/ip/health/prizefund/cptech-articles.html.