Subject: Re: mandatory patent auctions
From: Seth Gordon <sethg@ropine.com>
Date: Wed, 04 Oct 2006 15:32:24 -0400

> let's be wildly optimistic and say that each spend $1,000
> per year on patent medicine:
> 
>     $130,434,783,000 on patent drugs (before)
> 
> and that half of those expenditures simply go away thanks
> to 50% of new drug patents becoming immediately generic:
> 
>     $65,217,391,300 on patent drugs (after, also the amount saved)

I don't think this is the right way to look at the savings, because the
social cost of pharma patents is not merely the cost to consumers of
drugs under patent protection.  There are also the costs that the pharma
companies incur from paying licensing fees to one another or inventing
around patents that they don't want to license.  And there's the cost of
drugs or medical procedures that never come to market because nobody can
secure rights from all the patent-holders who might have a claim.

Besides, if a more rigorously-worked-out economic analysis proves that
the government would lose too much by paying out a 50% bonus on the
patents it releases to the public, I would just amend the proposal to
provide a 25% or 10% bonus instead, or have the government buy up 1/4 of
patents instead of 1/2 of them.  Those are just parameters to tweak.