In 2001 Sony, Toshiba, and IBM pooled millions of dollars to fabricate a technology known as the Cell processor. After years of R&D their pooled resources probably extended over a billion. Since the tech industry is largely a bit more economically free than others these company’s can spare to invest this type of money into it. The cell on it’s own if it were sold to consumers would be comparable to a $100-200 Intel chip. SImilarly AMD and Intel poor millions into R&D and sell thheir products anywhere from $40 to 1000. Intel, unlike the pharmacutical company has fronted all the original investment into fabricating smaller die sizes, up to the now 45nm die. They have beared this cost alone simply to enter the market first. Their products still remain at an appropriate cost and they still derive a profit.
Pharmaceutical companies on the other hand generally spend less time fabricating new products and their manufacturing costs are extremely low. The reason their costs are so high is due to a distortion of the natural market, it has nothing to do with the time or money that went into making it which when compared to the tech industry is assumed less.
Also, does it make sense for society to front the cost in R&D in products they may not necessarily be interested in purchasing? If a company is spending an exhorbant amount of cash on R&D into products that don’t sell than the company needs to go out of business as they are wasting resources. Modern medecine on the other hand has the state’s hand all into it perverting the natural order of a market economy. The states involvement has distorted the price mechanism.
Sadly all the major drug companies exist in country’s with heavy state involvement. It’s impossible to compare apples to apples here, so you will have to find another industry that operates on a similar level in the production of consumer goods and R&D Practices. I compare the tech industry to the pharmaceutical industry all the time because technically they are both technologies and business models tend to be similar.
You know that doesn’t prove anything about patents. Certainly not an Austrian analysis.
Then why do you insist on state intervention in the market? You claimed that without patents, no one would make drugs. You claimed the market would fail to fill demand.
That is precisely what patents are. Artificial monopoly privilege, which restrict free exchange. A patent is no different than a tariff.
Many of the costs are meeting regulatory demands, which also functions as another layer of monopoly privilege. The state allows the pharma companies to charge more for their goods, as long as the FDA and associated bureaus get their cut of the action. This again, limits competition.
You are asking the impossible. This is comparing apples to oranges. There are untold of number of variables that could affect production and innovation.
Imagine two cavemen are moving large stones around. One decides to roll his large stone on logs, essentially making use of the very first wheel. The other caveman sees this and thinks it’s a good idea. Does the first caveman have a right to destroy the second’s attempts at using wheels? For how long? What if caveman 3 a few miles away also thought of using logs to roll heavy things? Which one invented it first?
Patent law covers “non-obvious” innovations. Who is to say what is obvious? How many times have you had an idea for the solution to a problem that, when you looked it up, someone else has already thought of?
Ubiquitous is the idea that inventors set out to invent things in order to get a patent. They enjoy solving problems (we all do) and would continue solving problems regardless. I’m not sure what to do about drugs, but heres a clue: http://www.lewrockwell.com/tucker/tucker132.html
I am certain that patenting the “online transaction” or the “scaleable multiplayer online world” is an absurd abuse of the system. Heck, there’s even a patent for turn based combat card games: you can’t make one of those and sell it without recieving 10s of thousands of pages of intent to sue paperwork from hasbro.
Patents create an economic incentive to innovate. Why would I spend my money on R&D to develop something if somebody else can use the fruits of my labor without having incurred the costs that I was willing to spend? Many technologies would never be discovered in the first place if there were no IP laws. Intellectual property is property.
nonsensical. Patents stifle innovation. IP’s create legal monopolies which temporarily suspends the creation of new technology, as new technologies are built on old.