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Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
Dean Baker Selling Sickness 2010
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Dean Baker Selling Sickness 2010

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  • 1. Redesigning Incentives in the Pharmaceutical Industry Dean Baker, Co-Director Center for Economic and Policy Research
  • 2.
    • Problems of the Patent System
      • Bad Economics
      • Bad Medicine
    • Publicly Financed Research and Medical Education
  • 3. Current System: Patent Monopolies Support
    • Research and development
    • Medical education
    • Marketing
  • 4. Problems of Patents
  • 5. Inefficient Consumption/Use
    • Some people can’t use drugs altogether at patent-protected price
    • Use of inferior drugs
    • Improper dosage
  • 6. Distortions in Research
    • Copycat drugs – motivated by patent rents
    • Focus on patentable cures and treatments
    • Results kept secret
  • 7. Distortions of Education and Marketing
    • Misrepresent effectiveness and safety
    • Little attention to generics and non-patentable treatments
    • Kickbacks and outright bribes to doctors
  • 8. Other Waste in Pursuit of Patent Rents
    • Legal harassment of generic producers
    • Political interference in the drug approval process or public purchase decisions
  • 9. Public Funding for R&D and Medical Education
    • Master contracts – renewable long-term (8-12 years), limited number
    • Total funding comparable to industry funding -- $30-40 billion in U.S. (National Institutes of Health gets $30 billion)
    • Master contractors could either do research in house or subcontract (most research by industry is currently subcontracted)
    • All patents produced through publicly funded research are in the public domain (copyleft)
    • All results are fully public and posted on the Internet as soon as practical
    • Medical education would be carried through by people with no interest in pushing particular drugs
  • 10. Advantages of Public Funding
    • Price = marginal cost, all drugs are sold as generics
    • Most of the incentive to conceal results or misrepresent findings is eliminated
    • The incentive to develop copycat drugs is eliminated
    • There will be incentive to pursue non-patentable cures and treatments
    • Eliminates the incentives for bribing politicians and doctors and legal harassment

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