It’s important that we incent what we actually want. As it stands the science is often done in universities funded by federal grants. The monopoly owner—which is allowed to capture much of the value—is responsible for the drug testing process and marketing.
The drug testing process is no doubt important but is it so much more important than the initial drug discovery that the entity that funds it should be where all the profits go?
That’s a misleading characterization of the industry. There is a huge gap between university research and products people can sell, and its not just drug testing and marketing. (Think of the difference between the Google patent developed at Stanford and Google’s real search engine.)
The value of academic findings is only apparent in retrospect, after a drug has been shepherded through the development process by a biopharma company. The govt spends maybe $25-30B a year on drug research. The top 15 pharma companies alone spend like $70B a year on R&D
It costs over $200M to take a drug from academia to market just including out of pocket costs. Including the drugs that fail at various stages within industrial drug dev -- 90%+ of drugs -- and the cost to get a drug approved is $2.6B, not including academic costs
Compounds discovered in academia have like a 1 in 10,000 chance of getting approved. The group that analyzes which of those drugs have a shot at getting to market and funds the cost of that R&D are biopharma companies
The drug testing process is no doubt important but is it so much more important than the initial drug discovery that the entity that funds it should be where all the profits go?