Subject: Re: mandatory patent auctions
From: simo <s@ssimo.org>
Date: Wed, 04 Oct 2006 15:47:20 -0400

On Wed, 2006-10-04 at 12:32 -0700, Thomas Lord wrote:
> Let's assume that all players are looking at a financial market in
> which an annual rate of R is a good return.

Forgive me for my ignorance, but can you explain how do you come to the
following formula (and why you calculate the price of the patent with
it?):

> Third parties should bid:
> 
>     PRICE = $A / (1 + R)^20

Also can you show me where you get the numbers in the following
reasoning?
Where does the 1000$ come from? 
Where do you get the pharma spending numbers?
2-3 orders of magnitude more than 81B$ is in the order of trillions!

> Here:
> 
>     300,000,000 people in the US
> 
> let's call that
> 
>     130,434,783 households
> 
> 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)
> 
> that savings is a 25% subsidy on how much research?
> 
>       $81,521,739,125 (max amount of pharma research at which taxpayers win)
> 
> And you do understand that actual pharma research spending
> is 2-3 orders of magnitude larger than that, right?   Taxpayers
> will go bankrupt.