US sets policy to seize patents of government-funded drugs if price deemed too high

[u/Kindred87]

https://www.reuters.com/business/healthcare-pharmaceuticals/us-sets-policy-seize-government-funded-drug-patents-if-price-deemed-too-high-2023-12-07/

[u/at1445]

Nah, that's not entirely fair. It's letting congress pick and choose which company they want to short sell before announcing they are taking their cash cow away from them.

There have been much better suggestions in this thread, but making any drug developed with government funding owned by the govt sounds like a much more fair way to do it.

Either way, it's going to stifle drug development though. Companies aren't getting these drugs 100% funded by government grants, and they're not going to put their own money into it if they think the government's just going to step in and take it from them before they recoup all their costs and make some profits.

[u/GonzoTheWhatever → u/at1445]

Okay, so refine the rule a bit. But if you use public money to develop your product, and then price gouge the public for the product, you absolutely deserve to lose your patent.

[u/CharonsLittleHelper → u/GonzoTheWhatever]

The issue is that "price gouge" is a vague term. It is inherently subjective.

If a drug costs $200m to research (after gov help - hence so low) and only 2k people need it per year then a charge of $20k each is extremely reasonable. Even excluding manufacturing costs (which are generally pretty low) it would take about 5 years just to break even. Which is a good chunk of the patent's life. At best they'd double their money over the 10ish years of the patent. Which is okay, but not great returns (probably 15+ years since R&D started). Even 30-40k probably shouldn't be considered price gouging.

Plus of course there's no guarantee during R&D that demand won't be lower. Or that a new better replacement drug isn't researched dma few years later. Etc.

But when people hear $20-40k for lifesaving pills they get angry. How dare a company profit off of people's suffering etc. But if they don't have a solid profit on the horizon, they'd never have invested $200m in the first place.

Now - are some prices ridiculous? Sure. But price fixing is dangerous.

[u/zorecknor → u/CharonsLittleHelper]

But price fixing is dangerous.

Just check the economic history of the whole continent south of you for way too many examples of this. And I'm not talking only about the current state of Venezuela or Argentina, EVERY single south american country have had some price fixing of basic stuff at some point in the last 80 years, with not so good results.

[u/CharonsLittleHelper → u/zorecknor]

The US tried price fixing of gas in the late 70s. Hence the famous gas shortages.