Check out this TED talk: http://www.ted.com/talks/thomas_pogge_medicine_for_the_99_percent.html
This Thomas Pogge suggest government create a Health Impact Fund as an alternative to charging a high markup during a drug's patent period. The pharmaceutical company would receive compensation proportional to the improvement in health caused by their product. So if drug A produced by Company X improves health by 10% over the previous gold standard then they are compensated 10% from the Health Impact Fund for that market.
I agree with him completely that the current system is inefficient both in development and targeting populations in need. Since companies now need to recoup their development liabilities by charging as high a markup as possible during the drug's patent period they generally target diseases that affect those most able to pay for drugs i.e. the rich. And I don't mean the rich in terms of absolute wealth but also the collectively rich. Those who can afford the best health insurance or those living in countries with the largest socialized medicine coffers or even those in segments of the population with better benefits i.e. medicaid and medicare. Right now R&D and manufacturing make up a fraction of the total liability in developing a drug from inception to end of patent protection. Most of it is spent on marketing, litigation and lobbying. Terribly inefficient if the goal is to develop a drug at the lowest cost.
Of course this system is not perfect but I believe it's a step in the right direction. How would nutraceuticals or other non-patentable compounds work under this system? I feel their would need to be a separation between R&D pharmaceutical companies and manufactures since the large R&D cost would no longer be recouped according to sales. Rather the product of pharmaceutical companies would be the design and testing of the drug which would be paid with public funds. The manufacturing could be separate with competition driving down costs. The goal of making a drug is to make it as cheaply as possible while selling it at the highest price. The goal of developing a drug is to improve health among as many people as possible.
This Thomas Pogge suggest government create a Health Impact Fund as an alternative to charging a high markup during a drug's patent period. The pharmaceutical company would receive compensation proportional to the improvement in health caused by their product. So if drug A produced by Company X improves health by 10% over the previous gold standard then they are compensated 10% from the Health Impact Fund for that market.
I agree with him completely that the current system is inefficient both in development and targeting populations in need. Since companies now need to recoup their development liabilities by charging as high a markup as possible during the drug's patent period they generally target diseases that affect those most able to pay for drugs i.e. the rich. And I don't mean the rich in terms of absolute wealth but also the collectively rich. Those who can afford the best health insurance or those living in countries with the largest socialized medicine coffers or even those in segments of the population with better benefits i.e. medicaid and medicare. Right now R&D and manufacturing make up a fraction of the total liability in developing a drug from inception to end of patent protection. Most of it is spent on marketing, litigation and lobbying. Terribly inefficient if the goal is to develop a drug at the lowest cost.
Of course this system is not perfect but I believe it's a step in the right direction. How would nutraceuticals or other non-patentable compounds work under this system? I feel their would need to be a separation between R&D pharmaceutical companies and manufactures since the large R&D cost would no longer be recouped according to sales. Rather the product of pharmaceutical companies would be the design and testing of the drug which would be paid with public funds. The manufacturing could be separate with competition driving down costs. The goal of making a drug is to make it as cheaply as possible while selling it at the highest price. The goal of developing a drug is to improve health among as many people as possible.