Difference between revisions of "Prize System for Inventions"
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Some economists and legislators have advocated for a prize system instead of a patent system for pharmaceutical drugs (see [[Medical Innovation Prize Fund Act]]) given the potential for price hiking and deterring R&D in our current patent system.<ref name= "Radical" /> Legislators have proposed bills that provide for prize systems for a small class of drugs (see [[Prize Fund for HIV/AIDS Act]]). Under this system, companies that invent a new drug will receive a lump sum prize from a pool of up to $3 billion per year and no right to exclude would be awarded to the company. The money for the prize pool would be provided by the federal government and insurance companies. A panel of experts would determine which drug performs the best allowing research to be targeted towards a specific problem. <ref name = "Radical" /> Proponents of the HIV/AIDs Act including Bernie Sanders suggest that the prize system may lower barriers to entry and allow nontraditional parties to participate in finding a needed solution. | Some economists and legislators have advocated for a prize system instead of a patent system for pharmaceutical drugs (see [[Medical Innovation Prize Fund Act]]) given the potential for price hiking and deterring R&D in our current patent system.<ref name= "Radical" /> Legislators have proposed bills that provide for prize systems for a small class of drugs (see [[Prize Fund for HIV/AIDS Act]]). Under this system, companies that invent a new drug will receive a lump sum prize from a pool of up to $3 billion per year and no right to exclude would be awarded to the company. The money for the prize pool would be provided by the federal government and insurance companies. A panel of experts would determine which drug performs the best allowing research to be targeted towards a specific problem. <ref name = "Radical" /> Proponents of the HIV/AIDs Act including Bernie Sanders suggest that the prize system may lower barriers to entry and allow nontraditional parties to participate in finding a needed solution. | ||
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# Offer cash subsidy to consumers who value the patented product more than the marginal cost but cannot afford the patented product at a monopoly price. | # Offer cash subsidy to consumers who value the patented product more than the marginal cost but cannot afford the patented product at a monopoly price. | ||
| − | + | Many consider implementing a federal prize system for inventions to be impractical for several reasons. Determining both the criteria for award winning products and the valuation of each winning drug may pose a significant challenge. Suggestions include valuation based on social value, lifestyle improvement, or medical necessity. Additionally, awarding a prize too early may dissuade companies from commercializing products or pursuing R&D. Completely eliminating bias from the panel that decides awards may prove impossible and therefore decrease the competition needed to make the system work. <ref name="BU"/> | |
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==References== | ==References== | ||
<ref name="Radical"> [https://www.washingtonpost.com/national/health-science/radical-bill-seeks-to-reduce-cost-of-aids-drugs-by-awarding-prizes-instead-of-patents/2012/05/19/gIQAEGfabU_story.html] ''Radical' bill seeks to reduce cost of AIDS drugs by awarding prizes instead of patents', ''Washington Post''. </ref> | <ref name="Radical"> [https://www.washingtonpost.com/national/health-science/radical-bill-seeks-to-reduce-cost-of-aids-drugs-by-awarding-prizes-instead-of-patents/2012/05/19/gIQAEGfabU_story.html] ''Radical' bill seeks to reduce cost of AIDS drugs by awarding prizes instead of patents', ''Washington Post''. </ref> | ||
| + | <ref name="BU"> [http://www.bu.edu/law/journals-archive/scitech/volume131/documents/wei_web.pdf] Marylnn Wei, 'Should Prizes Replace Patents? A Critique of the Medical Innovation Prize Act of 2005'. "Boston University Journal of Science & Technology Law", (Boston: 2007). </ref> | ||
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| + | [[Category: Internal]] | ||
| + | [[Internal Classification: Legacy| ]] | ||
Latest revision as of 18:00, 2 September 2016
Some economists and legislators have advocated for a prize system instead of a patent system for pharmaceutical drugs (see Medical Innovation Prize Fund Act) given the potential for price hiking and deterring R&D in our current patent system.[1] Legislators have proposed bills that provide for prize systems for a small class of drugs (see Prize Fund for HIV/AIDS Act). Under this system, companies that invent a new drug will receive a lump sum prize from a pool of up to $3 billion per year and no right to exclude would be awarded to the company. The money for the prize pool would be provided by the federal government and insurance companies. A panel of experts would determine which drug performs the best allowing research to be targeted towards a specific problem. [1] Proponents of the HIV/AIDs Act including Bernie Sanders suggest that the prize system may lower barriers to entry and allow nontraditional parties to participate in finding a needed solution.
Proposed Prize Systems have taken many forms including:
- Opt-in systems where the government pays at least the monopoly profits that the patent holder would expect to receive.
- System where patents are exchanged for compensation through an auction.
- Offer cash subsidy to consumers who value the patented product more than the marginal cost but cannot afford the patented product at a monopoly price.
Many consider implementing a federal prize system for inventions to be impractical for several reasons. Determining both the criteria for award winning products and the valuation of each winning drug may pose a significant challenge. Suggestions include valuation based on social value, lifestyle improvement, or medical necessity. Additionally, awarding a prize too early may dissuade companies from commercializing products or pursuing R&D. Completely eliminating bias from the panel that decides awards may prove impossible and therefore decrease the competition needed to make the system work. [2]
References
- ↑ 1.0 1.1 1.2 [1] Radical' bill seeks to reduce cost of AIDS drugs by awarding prizes instead of patents', Washington Post.
- ↑ 2.0 2.1 [2] Marylnn Wei, 'Should Prizes Replace Patents? A Critique of the Medical Innovation Prize Act of 2005'. "Boston University Journal of Science & Technology Law", (Boston: 2007).
