

Please give us all your money - baha_man
http://www.badscience.net/2009/09/please-give-us-all-your-money/

======
frig
The moral calculus here is so obvious you have to have your head screwed-on
sideways not to see it.

Let's reduce it to the level of individual decisions.

I have a terminal disease.

"Pharma Joe" invented a recipe for substance S that will cure my disease;
there's no known cure for my disease at this time other than substance S.

My options are:

(i) try to negotiate with Joe to get his permission to make a batch of
substance S, thereby continuing to live

(ii) use publicly-available information to make a batch of substance S,
thereby continuing to live

(iii) not acquiring substance S, thereby resigning myself to die soon

Joe would prefer that I choose (i) or (iii); I prefer options (i) or (ii).

When we can arrive at an agreeable (i) there's not much to talk about; things
are only interesting when Joe wants me to pick option (iii) and I want option
(ii).

What is Joe's argument for why I ought to pick (iii) instead of (i)? It
amounts to:

\- sure, you could save _your own life_ by making a batch of S

\- but if you do that then I won't keep inventing substances like S, and thus
_in the future_ some _other person_ will have a disease for which there is no
cure, b/c Joe's retargeted his research to penis pills

\- so the _right thing to do_ is to go off in a corner and die (and quietly,
please), so that someone else in the future might live

It's not surprising that this is spectacularly unconvincing on two levels:

\- Joe's asking someone to choose to die so _someone else_ _might_ benefit at
some point in the future; aside the usual aversion to Christ-like self-
sacrifice on the part of individuals, it's more than a little cheeky of Joe to
insist on my making such an _extreme_ sacrifice for the greater good when Joe
himself is unwilling to make a lesser sacrifice (reduced profits) for the
greater good (we know he's unwilling to do this b/c we were unable to arrive
at a mutually-satisfactory arrangement in (i), like selling at prices the
about-to-be deceased can afford)

\- it's also unconvincing because the real "future proposition" isn't "I die
but Joe invents substance T that cures some other disease saving other
people's lives"; it's "Joe invents substance T that could cure some other
disease but then some other schmuck is going to be in the same position of
being unable to afford it and having this same conversation; my death just
kicks the can down the road"

...and thus most international agreements that allow Joe color of law to
enforce (iii) for "the greater good (of Joe)" have been agreed to as riders on
larger treaties and whatnot, making it unsurprising that impoverished
countries with disease epidemics try to wiggle around such terms as much as
possible.

It's of course absolutely the case that widespread choice of (ii) does
disincentivize further research on drugs targeting problems (ii)-choosing
populations opt for; it's not like the people making these decisions don't
understand the consequences...they've weighed the pros and cons and decided
that the best option (unsurprisingly) is to put their lives ahead of someone
else's intellectual property and deal with the fallout as it comes.

Even if you really think you'd put someone else's IP ahead of your life --
which I doubt you would, if it ever came to that -- it's not Joe's place to
decide that I ought to die for the greater good.

~~~
anatoly
I think the weakness in your analysis is that it's framed as a conflict
between you and Joe. Joe isn't really trying to force you to do anything.
Given that Jim is already making substance S without Joe's permission and
selling it to you and others like you, Joe is not claiming that it's immoral
or wrong of you to buy Jim's product. Joe is trying to make Bob, who's the
head honcho where you and Jim live, to force Jim to make nice with Joe and
only sell substance S after obtaining Joe's permission to do so.

The extra layers of indirection are essential, because while everyone would
agree that it's logical and reasonable for you to prefer buying Jim's product
to dying (this being your point), it isn't at all clear that Bob ought to
agree with that. Bob is supposed to represent not just your interests, but
also interests of all other people in the area. It's conceivable that a lot of
them will die much sooner if Joe switches to penis pills, than if Joe didn't
and continued to develop life-saving drugs. It's fine for you to decide to put
your life first and deal with the fallout as it comes; do you have an argument
as to why Bob ought to do the same?

~~~
frig
It is a little weak sticking with the individuals. But look at Bob's
incentives:

If you're Bob -- the duly-elected representative of the people's republic of
west brokistan -- then you've got the following calculation:

\- either you let Jim keep turning out off-brand tamiflu and (hypothetically)
thereby saving hundred-k to millions of lives ("didn't mess with a good
thing")

\- or you shut Jim down, then have the fun task of explaining to your
constituents that it's really better that they no longer be able to afford
those drugs

...at which point either:

\- Bob uses an argument like Joe's argument; this isn't going to be convincing
to the public @ large b/c:

\-- if they were buying Jim's stuff and now they can't the same counter-
arguments as in the individual case applies

\-- if they weren't buying Jim's stuff they now can't if they need it in the
future

\-- additionally Bob is taking away local industry and local autonomy so on in
favor of foreign interests (which rarely fares well in any country)

...which is _awesome_ for getting reelected; or maybe Bob tries the
realpolitik strategy and explains:

\- oh sorry I couldn't negotiate a good (i) option which is why we're forced
picking between (ii) and (iii)

\- oh but also sorry (oh, so very sorry) we can't pick (ii) even though we'd
like to b/c doing so risks some terribly nasty trade sanctions that we just
can't afford right now

...which is honest but makes Bob look so completely useless I wouldn't like
Bob's re-election odds with this approach, either.

So I think given the incentives Bob's likely choices are obvious, assuming
he's an elected official of some sort; a more dictatorial head honcho might
make a different decision.

Whether someone more free to take a stab at long-term utility maximization
ought to let Jim keep operating or not is pretty much a function of trade
sanctions and so on first and only after that some calculation about "what
amount of drugs will we be able to buy in the future that cover what % of what
conditions will be significant in the future"?

------
patio11
I can think of no better way to convince drug companies to stop making
treatments for the world's poor, and start pouring even more of their research
into lifestyle drugs for the world's rich (cholesterol medication, anti-
depressants, anti-allergy medications, Viagra, etc etc), then stealing their
stuff and calling them mass murderers for having the gall to make it.

See: malaria. The existing, cheap, mostly efficacious, patent-unencumbered
drugs face permanent lack of supply. Last time I checked exactly one company
bothers to make them -- there just isn't any money in it. [Edit: A quick
Google suggests my memory is failing me.] Drug-resistant malaria is on the
rise, and the drug companies pretty much won't touch malaria drugs with a 30
foot pole. If they make something that works, it will be promptly stolen under
the color of law.

Or they could pump a few hundred million into another promising drug which
will be overprescribed to rich Americans, and make billions. Hmm. Decisions,
decisions.

~~~
mcantelon
The drugs that were pirated weren't made for poor countries in the first
place. They were made for rich countries and the drug companies in question
get compensated for their research by their sales in these rich countries.

I don't think drug companies are going to stop researching drugs that will
make them money in rich countries.

------
alan-crowe
The missing bit of this story is that governments have two ways to promote the
development of new drugs and can run both in parallel.

First is by passing patent laws. The attractive property here is that the
government is not paying out on research that fails. Private business does
that and has to suck up the losses. The other side of this coin is the big
"windfall" from monopoly profits when the research succeeds. What seems like a
shrewd incentive scheme ex ante, seems immoral ex post.

The second way is by funding research in national laboratories out of general
taxation. The problem is that the government keeps paying for research that
fails, and since success is rare the process is hard to manage. At what point
does the government admit that a research institution has lost its focus and
should be closed?

This second way raises awkward questions. Having worked in government funded
research myself I'm painfully aware of how easy it is to persuade one-self of
the merits of long term research over short term research to the extent that
one wanders off into the wilderness and never achieves anything. The profit
motive is one way of countering this tendency. Are there other ways? They need
to work better than the profit motive, but that is setting the bar pretty low.

I think Ben Goldacre could better spend his time talking about the psychology
of being a researcher. The second route is seen by many as a money-pit, but
there is much new thinking on Public Choice Theory and Mechanism Design. Are
we not ripe for some new and better ways of running publicly funded research?
If we never get round to thinking about these issues, then the mocking title
of "Please give us all your money" also works well as an attack on publicly
funded science.

~~~
nfnaaron
"governments have two ways to promote the development of new drugs and can run
both in parallel.

First is by passing patent laws.

The second way is by funding research in national laboratories."

What if the government laboratories did their research under the direction of
private business? This would reduce the risk of govt labs wandering into the
wilderness, offload some of the risk from business, and could provide society
with a stake and return in the outcome, expressed in lower prices or wider
manufacturing rights or whatever.

~~~
anamax
> What if the government laboratories did their research under the direction
> of private business?

How about not?

If you're worried about dumb spending by govt, this won't solve it.

If the likely value is too low for a company that would get all of the
benefit, it's certainly too low for a govt that gets less of the benefit.

------
antipaganda
I'm shocked that none of you have seen the real problem here. It was right
there at the end of the article - this is a small percentage of the market
we're talking about here, 1% in Africa, similarly small numbers in the rest of
the third world.

What does that tell us? It tells us that the only reason big pharma even
bothers to fight for their patent is because they are legally forced to do so;
if some idiot in the US can make a case that they're not defending their
market, they might have it taken away.

They don't care about poor people healing themselves; they care about
relatively rich people in the US buying generic drugs because they're cheaper,
even though US society can afford to pay for it.

Drug companies aren't monsters, they're corporations - machines for making
money, pure and simple. They're just doing what's required of them.

Change the patent laws - and the diplomatic pressures of the US State
Department - to allow third-world companies to sell generic drugs to people in
third-world countries, and not people in first-world countries, and bam!
Problem solved.

------
Estragon
There has to be a business model for passing these savings on to US consumers.
It's much like the dilemma big publishers are facing: If you sell through the
internet from a country like India, shipping the drugs in anonymous packages,
how is US law enforcement going to stop you without substantially infringing
on other people's liberty?

~~~
mhb
The "savings" are the difference between the cost of manufacturing drugs
(negligible) versus amortizing the development and approval cost (enormous).
Very smart people are already spending a lot of money and effort to reduce
drug development cost. Reform the FDA to reduce approval cost.

Mandate lower drug prices in some other way and say goodbye to future new
drugs.

~~~
ZeroGravitas
_"Mandate lower drug prices in some other way and say goodbye to future new
drugs."_

Or find new, different, better ways to promote and reward invention and say
hello to lots more future drugs.

Patents are broken, even if you agree with them in principle. See software
patents for an area where they are broken beyond repair. Medical patents
distort the market a great deal. See the comments on the original article for
various dubious schemes that only make sense under the current patent regime.

------
DanielBMarkham
Patents are a trade-off. In return for exclusively selling something for ten
years, I spend a lot of time and money inventing something lots of people want
to pay for.

Seems to me like a fair deal -- if the time limit is truly ten years, if the
people who are the market are the same people who will benefit at the end of
the period, and if patents are not overly-broad.

That's a lot of ifs, but it works in the U.S. The problem is that the market
in the U.S. is nowhere indicative of the market in the third world, yet the
drug companies want the same trade-off to apply everywhere. To this author's
point, that doesn't seem to work so well.

Having said that, the answer isn't so easy either. Once you start using
government force (or ignoring compliance) to appropriate other people's IP,
the incentive goes away.

Of course you can argue that there are other incentives: altruism, government
mandates, public-funded research. But all of those things haven't proven to be
very effective, no matter how much hand-waving or yelling the supporters do.

This is not an easy problem.

