Comment by mtgx | Hacker News Reader

Comment by mtgx | Hacker News Reader

They sound like very reasonable proposals, that I would think most people with common sense with accept. I especially find interesting the proposal to use R&D for the pharmaceutical industry from the Government. I just don't know how practical that is. It would need serious commitment and serious investment from Governments to do that.

In countries where healthcare is also paid by the Government, that might work, but I doubt many of them would take on it eventually. I don't think any of this would be implemented in US in the short to medium term, though, as that kind of proposal would be immediately considered communist by half the country (especially if Fox News has anything to say about it).

I'm also not sure if I would let the Government be 100% responsible for the pharmaceutical R&D, but maybe it could use taxpayer money for some R&D anyway, and any drug that comes out of it, would be patent-free. Think of it as the open source Linux to Microsoft's Windows, or Firefox to IE. Companies would still be free to patent drugs and sell them for whatever they want, but the Government would be able to reverse engineer or create very similar alternatives that are patent-free, and much cheaper.

> I especially find interesting the proposal to use R&D for the pharmaceutical industry from the Government. I just don't know how practical that is. It would need serious commitment and serious investment from Governments to do that.

You're quite right in this analysis - especially with your followup about this being the most applicable where healthcare is also paid by the government.

In Europe, 83% of the pharma revenue - on average - comes from taxpayer money, mostly through drug subsidies. Yet, only 15% of their revenue total is used for R&D (and another 30% of the total is used for manufacturing), according to the pharma industry's own numbers.

So if we pay all of those 30 percent units for manufacturing from the tax coffers, another 15 percent units is needed to bring research on par. That takes us to 45 percent units - but we're paying for 83 percent units today. We can afford to double the research and still save a significant chunk of taxpayer money.

This doesn't even begin to take into account that 70% of today's new pharmaceuticals are so-called copycat drugs with no other purpose than to circumvent another company's patent monopoly. If we assume that these resources will be spent researching new drugs instead, as nothing is patent-encumbered, we have tripled the research just in forcing drugs to be generic, before taking actual increases or decreases in research funds into account.

The loser here is the pharma industry's "marketing" account, which has been overly well-fed with taxpayer money.

Cheers, Rick

There's also the point to consider that much of the pharma industry's output is bogus: see Ben Goldacre's recent book Bad Pharma.

> They sound like very reasonable proposals, that I would think most people with common sense with accept. I especially find interesting the proposal to use R&D for the pharmaceutical industry from the Government. I just don't know how practical that is. It would need serious commitment and serious investment from Governments to do that.

So I've worked in government-sponsored defense R&D. If you think all the patent litigation creates inefficiency in the system, you can't even imagine how much inefficiency is created by government funding of research.

Government funded research is absolutely necessary. There are tons of things the free market would not naturally invest in without government funding. Government funding is necessary to create products, like the internet, that the market doesn't necessarily know it wants yet. But that comes at the cost of monstrous inefficiency. It's not often the case that the politically-important subjects of research are the same as the economically-important subjects of research. You see this in medical R&D, which is heavily funded in the US by NIH grants and the like. Tremendous funding goes to researching end-of-life diseases like cancer and alzheimer's (probably because they affect old people and old people vote), and relatively little goes to research to improve the health and quality of life for working-age people.

Reply on news.ycombinator.com