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We Need an Antibiotic Prize

It’s rare that I call for government intervention, but because government already raises the cost of drug development to such stratospheric heights, if they don’t do something to encourage new antimicrobial drugs to be developed, we’re going to be very very screwed. By the time this rises to the level of a real crisis (e.g. when there are enough sick people dying of diseases that haven’t been lethal for years) it’ll already be too late, and you’ll be waiting a decade or more before any effort started at the point of a crisis come to fruition.

The problem is this: new antibiotics are difficult to find, and any new antibiotic that would hit the market is practically guaranteed to be held in reserve for infections that can’t be treated by current antibiotics. The market will tend to be small. Because of these market realities, there have only been two novel classes of antibiotics produced in the past 40 years.

I would suggest a prize of sufficient size to guarantee a hefty return on investment to any research team or company that can successfully bring a new class of antibiotic to market, and that has a reasonable safety and pharmacological profile. For libertarians that are uncomfortable with government involvement with the market, you can justify it with the fact that antimicrobials are a critical component of our war fighting capacity as a nation. There’s definitely a military justification to spawn new development. The fact is that without some kind of incentive, new antibiotics just are not going to be developed, and I don’t think you’ll have any luck convincing the American people to drop the FDA requirements that raise the barriers for new drugs entering the market. A prize is the most efficient way to deal with this kind of problem.

58 Responses to “We Need an Antibiotic Prize”

  1. Roberta X says:

    But why does the fed.gov have to be the ones to put up the prize money? –See Ortig prize, Ansari X-prize, etc.

    • Sebastian says:

      It doesn’t necessarily have to be. If Bill Gates wanted to get together with a couple of dozen other billionaires and put up the prize, I’d welcome that. But to be a proper incentive, you’re talking high 9 figures, and probably more realistically 10 figures, possibly going into 11. Expensive, sure, but that’s about what an F-22 costs, and not having half your soldiers dying of preventable diseases in war is probably worth more than an F-22.

      The incentive has to be high enough that the return convinces pharmas to take resources off mass market drugs people will take every day for the rest of their lives (which make billion a year during their patent lifetime), and onto something that is generally regarded by the industry as a sure loser in terms of recouping research and development costs.

      • This is one of many reasons why I moved away from libertarianism as I learned more history. Strictly speaking, the government does not NEED to do stuff like this. But there are situations where governmental encouragement of new technologies and basic scientific research can force an enormous technological and economic gain for a society.

        As an example: what private company is likely to get fusion power to market? And yet, when it happens, it is likely to make petroleum and its Middle Eastern purveyors and associated craziness obsolete.

        • BBobC says:

          Yah, but libertarianism isn’t about no government, it’s about small government to cover the gaps that the market creates, this would be one of them. Prizes are efficient, small, and exciting because there’s a race thing going.

          • Bitter says:

            I think you’re on to something with the exciting thing, BBobC. There are larger arguments to be made for why this covers what one can argue is a relevant government function at a far lower cost to taxpayers than if the government actually tried to do it themselves, but the contest aspect isn’t lost. It’s a bit of an investment that promotes entrepreneurship – an important part of what we want to promote as part of the American spirit.

            • HSR47 says:

              This.

              One could argue that biological agents that are resistant to our current antibiotics, especially when such resistance can be conferred as easily as TFA suggests, pose a threat to our nation.

              As such one can legitimately argue that acting to promote the development of new drugs to which such agents are NOT resistant is paramount to the defense of this nation. As such, a system of prizes to encourage the development of such drugs is the MOST free-market solution available to us.

          • A Critic says:

            Libertarianism is about liberty. Government is about tyranny. The two, liberty and government, are mutually exclusive. Create a small government to rob people and spend it on spoiling people afraid of a few germs and wait a few generations and you have a huge government.

            • BBobC says:

              No, you’re talking about anarchy, libertarianism is not anarchy. There is a distinct use for the government in services that the market cannot or will not provide. It also serves as a mediator and abitrator of disputes and enforces property rights. Governments also have the power to compete, if I don’t like Texas laws I move to Oklahoma

              • A Critic says:

                Libertarianism=anarchy. Many others have reached the same conclusion. You can’t have liberty when you have a group of tyrants officially empowered to violate liberty in order to defend liberty. The entire concept is bizarre and absurdly nonsensical.

                The government enforces property rights? Are you mad? Taxation, prohibition, eminent domain, regulation, civil forfeiture ring a bell?

                The only services the government provides are ones that do not deserve to exist, such as “free” rides, mega mass murder campaigns, institutions of ignorance and incompetence (aka schools), etc.

                Governments do not compete within their jurisdictions.

  2. Roberta X says:

    Clayton, you mean fusion power like the way the feds have made space travel cheap and readily available?

    Srsly, if we try to use the unwieldy cudgel of Federal power, all we get are HEW projects, space shuttles that blow up, and solar-power scams.

    It’s not so much I have faith in the “market,” unfree and contorted as it is, it’s what I *know* the Feds and states can’t do, and that’s anything except come up with more excuses to spend money they haven’t got on flimsy B–S— that won’t work.

    …No, wait, they’re pretty good at arranging for the killing and maiming of people. Not efficient at it but they sure do a lot of it, our own guys and guys that don’t much like us, too.

    It’s hard for me to trust an organization with that kind of track record. I seem ’em as little more than a lesser evil. YMMV.

    • Sebastian says:

      I think there’s a role to be played in funding cutting edge research that has little chance of panning out market-wise, provided there’s some legitimate national interest in funding such research.

      Getting to space, for instance, had military and foreign policy importance, so the fundamental technology is now there if the private sector has an incentive to get into it (which seems likely now). Atomic power also was of military importance, but had use in the private sector. Fusion research, likewise, has military importance.

      The problem arises is when the government starts to pick winners and losers in the marketplace, like with the solar debacles.

    • The government has a pretty good track record when it promotes basic research and encourages the private sector. Corrupt? Often. There are times when their encouragement produces profoundly destructive consequences, such as the subsidy of railroad expansion created enormous problems for the Plains Indians, and promoted a concentration of economic power that played a part in creating the Progressive movement in the 1890s.

      Just one question for you: what private companies sent anyone into space first?

  3. Matthew Carberry says:

    I think there’s a middle ground there.

    The US Space Program did the proof of concept work and paid to develop the basic tech that would have made the holistic expense of manned spaceflight pretty unattractive to private industry in that short of time frame. Plus, science.

    Their continuing monopoly on it after, say, Apollo is more where the problem lies.

    This kind of one off, absorb the initial costs with a rational enumerated powers justification to spur something the private sector can do better carrying forward is, I think, a decent purpose of government.

    After all, if the market can’t support what seems to be a rational and “good” idea long-term, at least that was learned, as opposed to being left in the realm of what-ifs and pipedreams.

  4. Patrick says:

    People get together and form societies for a reason. Some of the things we need must come from a collective effort. Trans-national railroads, highways and rural electrification all were things that citizens needed, so we built them. Together.

    Government got awful high and mighty after those accomplishments, though. Modern libertarianism is a reflexive rebellion against the over-reach and intrusions. Somehow, many of us have all come to the conclusion that it has gone too far.

    That said, there is still a place for a government of the people to stand and do something that embodies something we all truly need. Advanced antibiotics seem like a good candidate to me. Note that Sebastian left out the utter lack of economic benefit from developing these drugs, because in general the world will generify them faster than you can dial a patent lawyer. Most of the world – including India and China – refuse to honor drug patents when it suits them.

    India produces so many advanced antibiotic drugs that they dump excess into rivers that are now blooming super-resistant microbes. Going to a hospital in India can be a lethal experience because they have overused antibiotics so much that things like MRSA go around like the cold (I have doctor friends in India, or rather…from India who just got here). They caught on to the damage, but it’s too late. Maybe next time they’ll be smarter about it.

    This work doesn’t have to come from NIH or FDA labs. But citizens (via the government) can surely carve some of what we spend on Hawaiian vacations for the entire Ninth Circuit and seed some private chemists to start licking poison frogs from the Amazon, or whatever it’ll take to find the next Penicillin.

    • Can we have some of the 9th Circuit judges go lick the poison frogs instead? :-)

    • Alpheus says:

      Let’s be careful about attributing to government the “fantastic” successes of the transcontenental railroad. “The Myth of the Robber Barons” actually goes into detail about a certain railroad that made it across the continent pretty much all by itself, without government help…or at least, without nearly as much help as its southern bretheren.

      How did it do it? The owner of the railroad would carefully lay several miles of railroad into new territories, and then encourage farmers to move out and farm by providing them discounts for transporting their food. As a result, he had business all along his transcontinental railroad.

      Granted, it took longer than the famous ones; but they didn’t have the customer base after they completed, and they were in such a great hurry to complete their lines (to grab as much land as possible), that they had to re-do significant portions of railroad, to fix for things like incorrect grade. And they made the public angry, because they would try to make better profits with various discounts.

      As a result of all this, the Government passed laws requiring transparency, which effectively ended special treatments…and which made the Northern person rather angry, because he was in the process of using his special discounts to open up trade with Japan (which effectively petered out, after the legislation was passed).

      So I question the value of “collective” work, even if I agree with Sebastian. Ideally, we should teach as many people as possible the mess we’re in, as a result of meddling by over-cautious laws like FDA and HIPPA (among other things)…but the easy way out would be to offer a prize.

      Then again, if reform is the better way to do it, then long-term, that is most likely the better way to go…

      • Patrick says:

        Not to derail this further (see what I did there? I made a punny)…but the railroads could not have done it themselves. And rural areas would not have received power without societal intervention, just as today’s rural communities are having trouble getting broadband without a similar push (though wasteful in historical terms)…blah, blah, blah.

        I do a lot of work around government and am probably more cynical than most here when it comes to what they cannot do. But there are some things – not a lot of thing – that will generally only occur when lots of people act through some centralized authority.

        My concern is more about money funneling to connected parties; the inherent wastefulness of grants and awards; and the fact that only insane people are willing to actually go near any of it.

        So while it’s a good idea, I concede it would almost surely fail because they’d screw it up.

        On a side note, the Gates Foundation did something like this for Malaria. They went beyond drugs, but they are spending good money trying to inoculate against it, rather than just treat it (prophylactic antibiotics are troubling for a lot of reasons and are not truly inoculates). Maybe we need to get Warren Buffet to stop pimping the President and put some of his fortune into next-gen antibiotics.

        Who are we kidding? He’d almost surely try to spin it for a buck. There’s a reason he is not being charitable while alive: he cannot part with it for a minute.

        • Alpheus says:

          I think you missed my point, which was this: the one transcontinental railroad that actually put effort into “going it alone”, was also the only one that didn’t have to declare bankruptcy after a decade or so.

          We should be careful when we claim that “we can’t do X without government help!” It isn’t nearly as true as we are led to believe, and the results of even the “successes” can be rather problematic, at best.

          And we should also remember that the market is resilient, and can come up with surprising solutions to the problems we face–solutions that government wouldn’t have likely come up with, if given the opportunity! (Because Government is Force, when they face a problem, they have a greater tendency to resort to “brute force”, when more delicate solutions are more appropriate…such as with the example of that Northern railroad I gave.)

          • Sebastian says:

            Well, it depends on what it is you suggest we can’t do without government help. Providing fiber-to-the-home for rural communities would be among those things we can’t do without government help, because the cost to put in the infrastructure couldn’t be recouped in any reasonable amount of time, and thus would not be of interest to private companies who have to answer to investors. The same was true for electrification years ago.

          • Harold says:

            Why were the others going bankrupt bad for the nation, especially in the long term?

            I mean, telecom costs are now lower than they would have been otherwise if it wasn’t for all the telecom bankruptcies that were by far the largest part of the “dot.com” bust. The fiber, lit and especially dark, has done us well for more than a decade.

            As I recall, the subsidized railroads weren’t even getting paid in cash, but in land … and the worse the terrain they drove their railroad through, the more land they got. So in that respect they didn’t necessarily build railroads that were economically viable, or at least for portions of their routes. But that would have untangled itself in time.

            And when you look at how much of the West the Federal government kept for itself, I’m not so unhappy that, however corrupt the above process, a lot got into private hands through it.

      • The Great Northern was certainly able to expand without the federal government assistance that many others enjoyed. (And remember that there was both federal and state “assistance” on many railroads.) But it would have been much slower. The Plains Indians would have definitely benefited from this much slower expansion, but American society generally benefited from the subsidized growth.

        The text that I used when I taught state & local government some years ago was generally a mainstream, slightly left of center text. What surprised me was that it pointed to a body of research that found that the ONLY governmental subsidy that could be clearly established to provide a general societal economic benefit was the building of roads. Even higher education, a liberal solution to all problems, had no clear economic benefit. But roads did.

        I don’t think anyone seriously doubts that Al Gore’s information superhighway (originally a DoD ARPA project, back when I first used it in the 1970s) has been a major economic gain for every society that uses it. It makes business possible that would have been economically infeasible 20 years ago.

        My business Scoperoller just shipped its first order to Greece. In 1980 or even 1990, there would have been no way for a Greek amateur astronomer to have found my product and my company. The costs of getting a check drawn in U.S. funds (instead of using PayPal) would have discouraged the transaction. Without email, and the ability for me to translate instructions into Greek online, it would have been a slow and clumsy transaction.

        Would the Internet even exist without ARPA’s funding? No way.

        • Sebastian says:

          I’m curious to know how a slower roll out would have benefitted the plains Indians? In the long run, it would still have ruined their way of life, just more slowly.

          • HSR47 says:

            I think he’s implying that, while their way of life would have been impacted to a similar degree, it would have been a more gradual and gentle process; In other words, it would have taken longer, and there would have been less violence perpetrated against them.

  5. Not Rick says:

    One huge incentive to work on a new antibiotic would be to NOT have to create a full container load of documentation that NO ONE is going to read.

    If your looking at something that will likely not be put on the market and in anycase will not be marketable for six to ten years, you’ll need a pretty large prize. You’re asking them to risk upwards of a billion dollars, out of pocket, and half again as much in capital expenditure.

    I like the prize idea though. I think you could make it work. Say 10 Billion, and 100% write off for associated out of pocket expense for all contestants.

    Given how much money they’ve pissed away on completely useless stuff – this could be a serious win.

  6. Harold says:

    Would a prize work?

    This is far worse than rocket science; prizes have been proposed for e.g. putting N pounds of cargo into orbit, but we knew a sufficiently competent company could do that.

    Correct me if I’m wrong, but a drug company could in good faith and with plenty of competence spend zillions of dollars seeking novel antibiotics and still utterly fail. What’s going to motivate them to try when the downside is so total?

    • jake says:

      nail on the head Harold!
      Guys, don’t you think they’re trying?… they’re trying. a good novel drug would be a huge blockbuster… in actuality, there really already is a prize. this isn’t something quite like putting shit into space, or even making the 100 mile per gallon car. there are a limited number of firms that can do this, but I like the idea of making it more a priority among their R&D divisions. if it makes you guys feel any better, there are bigger things coming down the pipe with regards to these things, but when they do come, they will be sparsely given just like you fear Sebastian. from here on there is going to be a caution towards willy nilly giving antibiotics to protect their sensitivity. carpet bombing them to the public and developing nations (a la TB drugs) giving them in chicken and cow feed, antibiotic resistance comes from their overuse.

      • Harold says:

        Actually, as far as I know they aren’t particularly trying.

        As Sebastian pointed out, any new novel antibiotic would be reserved for when all others fail like vancomycin was for many years, and therefore a company getting one all the way past the FDA and initial wider sales would probably not make its money back before it lost patent protection (and the usual suspect would scream at its pricing anyway).

        Another reason not to try is what I pointed out above, no matter how determined, no matter how competent, they can’t be at all sure they’d even be able to come up with one. Even if it would save many lives, drug companies can’t afford to bankrupt themselves trying to do this.

        A bit more, based on Wikipedia, which indicates that daptomycin is the only truly novel antibiotic in 40 years. Trade name Cubicin, after Cubist Pharmaceuticals (“Cubist is one of the few firms that have continued to research in antibiotics while larger pharmaceutical companies have abandoned such research.”) which bought the rights to it in 1997 after Eli Lilly gave up due to side effects revealed in Phase I/II trials.

        Reading between the lines of the above, I suspect they were more willing to roll the dice on daptomycin because they could afford to go out of business if they failed or are subsequently killed by lawyers.

        A few notes from their web site: their other antibiotic brought to market is through a partnership, and it’s not systemic (won’t circulate in the blood); has important niches in the gut but is necessarily “narrow spectrum”.

        In their pipeline are variations on their marketed drugs, another drug like the one above (might be novel, but again it’s very limited in application) and a not really novel cephalosporin and beta-lactamase inhibitor combination. I.e. good stuff, but nothing truly novel and blockbuster. The only one that might be both is the one they bought.

  7. asdf says:

    A taxpayer funded prize would actually be more libertarian than patent protection, if you really think about it. Patents are basically a tax imposed on us by government, with the goal of promoting socially beneficial scientific research. But the end result is still the same as a tax – we pay more at the cash register because of a government market intervention (patents). If we could accomplish the same goal by paying the up-front costs, but leaving the results of the research open to all competitors, it would probably be cheaper for everybody in the long run.

    • Harold says:

      You’re forgetting about the utility of proper patents as an alternative to trade secret protection. In return for disclosing to the whole world your invention and how to make it, you get a government granted limited term monopoly.

      Drugs can be a weird example of that, but they do provide a mechanism for drug companies nowadays to lose less money on the path from R&D to a successful drug (our host is welcome to correct me if I’m wrong, but from what I’ve been reading lately the brand name drug industry isn’t profitable anymore when you run the raw numbers).

      • asdf says:

        I’m not sure I follow you completely. I was just pointing out that government funded R&D is basically the functional equivalent of patents in that they both “socialize” the costs of R&D. I would take it a step further than Sebastian and say that instead of a prize, the government would just conduct R&D and share the results openly.

        In the government funded R&D scenario, companies would have to compete on level terms, which should translate into lower drug prices. Basically everything would be generic and whoever could produce them the cheapest would own the market (of course that will lead to ‘antitrust’ problems, but let’s pretend that’s not an issue for now…).

        • Sebastian says:

          The problem with government directly funding R&D is that politicians and bureaucrats are in a poor position to decide what’s good research, bad research, and who’s feeding them a load of bullshit. The taxpayers are far more likely to get taken for a ride in that scenario.

          • asdf says:

            We’re already being taken for a ride as it is now. We already subsidize R&D costs for the rest of the world as it is now through higher retail prices. What makes you think any prize wouldn’t be subject to the same problems as direct research funding? *Someone* has to decide which projects are worth offering a prize for, and they will have to sort through all the same stuff to avoid gaming.

            • Sebastian says:

              Pretty much everyone agrees we need new classes of antibiotics. That’s a pretty good criteria, and doesn’t require picking winners and losers. The prize just creates the incentive.

              • asdf says:

                But you and I both know that’s not how it will really work. No private company will invest that much money without first being reasonably sure they will be the “winner”. Of course this will be pre-arranged behind the scenes…..

                • Sebastian says:

                  Why wouldn’t it work? If you look at the drug market for the past 20 years, the vast majority of drugs end up failing in clinical trials. Those that do get approved are likely to be market failures. What kept everyone in the game is that if you put a blockbuster on the market, for the duration of your patent is is essentially a license to print money. Drugs are a very risky business, but it’s also highly profitable when you get lucky. That’s what keeps companies in the market.

                  The purpose of the prize is to create market for new antibiotics, where currently there is not much of one. Normally you could expect supply and demand to deal with this, but the R&D for a new drug is so lengthy, by the time this becomes a real crisis, it’ll be a decade or more before any new drugs hit the market.

                  • A Critic says:

                    The purpose of the prize is to create market for new antibiotics,

                    That is not true. A market is not created by a subsidy.A market is created by demand.

                    And if your subsidy does produce a new antibiotic, how will we know if it will be effective on the next antibiotic resistant strain or the next new disease to come along? What guarantee is there that the prize winner will produce the desired result?

                    For libertarians that are uncomfortable with government involvement with the market, you can justify it with the fact that antimicrobials are a critical component of our war fighting capacity as a nation.

                    I forgot to respond to that choice quote. So those people who believe in liberty should forgo their adherence to the principle of liberty in order to support our government’s capacity to wage war on liberty around the globe? Surely you, as a pseudolibertarian, will then also agree that we need to prohibit civilian gun ownership because irresponsible civilian gun ownership imperils the right to keep and bear arms?

                    • A Critic says:

                      I apologize for the sloppy formatting – the editor is not loading.

                    • Sebastian says:

                      I have fixed the formatting. I’m waiting for an update for the online Edit. Hopefully a fix will be out shortly.

                    • Sebastian says:

                      And if your subsidy does produce a new antibiotic, how will we know if it will be effective on the next antibiotic resistant strain or the next new disease to come along? What guarantee is there that the prize winner will produce the desired result?

                      What you’re looking for are new classes of antibiotics. Basically antibiotics that have some mechanism that is novel, and to which bacteria have not developed resistance. You can easily test efficacy in laboratory, animal and clinical trials to ensure that the novel mechanism of attack works. If it does, it should work fine on resistant strains.

                      Could resistance be developed to the new antibiotic? Sure. But that’s the nature of the game. You need new classes of antimicrobial drugs to keep up with the mutations that lead to resistance.

                      I forgot to respond to that choice quote. So those people who believe in liberty should forgo their adherence to the principle of liberty in order to support our government’s capacity to wage war on liberty around the globe?

                      There are virtually nothing free market about defense procurement. The government is the only customer, and the only market for the product (ignoring friendly foreign government who often buy our hardware). But the mainstream view is that we need an Army, Navy and Air Force. If you don’t agree with that, you don’t agree with that, but it’s a radical viewpoint shared by few that I don’t feel needs to be addressed.

                    • A Critic says:

                      You can easily test efficacy in laboratory, animal and clinical trials to ensure that the novel mechanism of attack works. If it does, it should work fine on resistant strains.

                      This is a political contest – the efficacy will most likely be tested in a back room, strip club, or brothel.

                      it’s a radical viewpoint shared by few that I don’t feel needs to be addressed.

                      “It is a crusade only of the brave to defy the laws of tradition” – Primus

                      There are two traditions here: 1) A mass murder machine is a necessary evil and 2) Thou shall not question or discuss the necessity of mass murder machines

                    • Sebastian says:

                      The purpose in using a prize system is that the criteria are very public and objective. Everyone knows what constitute a new class of antibiotic, and efficacy and safety are also fairly objective criteria, though a bit less so.

                      A prize is considerably less subject to those kinds of corruptive forces than when the government directly funds research, which is the current model. NIH Grantees don’t have much incentive to cry foul if someone else’s grant funded research turns out to be a boondoggle. They have a much stronger incentive to cry foul if a prize award is rigged.

                    • A Critic says:

                      A prize is considerably less subject to those kinds of corruptive forces than when the government directly funds research,

                      Correct me if I’m wrong, but wouldn’t the size of the prize dwarf any current grant or other funding? Wouldn’t there be considerably more incentive to cheat by any means necessary in order to win a whole lot of money?

                      They have a much stronger incentive to cry foul if a prize award is rigged.

                      That’s after the prize check has been written and the kickbacks are long since deposited into foreign bank accounts.

                      If you get your wish, it will be at least five years before Congress gets around to doing this, and probably longer. Then it will be five to ten years before a winner is announced. The country is going to be a totalitarian police state in ten to twenty years – many people are already afraid to speak out in public – by the time you get a huge cash handout like this most won’t dare criticize the winner and those who do will probably regret doing so.

                      But I really should look on the bright side – a little more inflation means the government will be a little closer to collapsing.

                    • Sebastian says:

                      The key to avoid corruption is to have transparency, and when your criteria for the prize are objective and public, the incentive for corruption is actually less because if it does occur the odds of getting caught are considerably higher.

                      The problem of direct funding of research is there’s essentially no accountability, because the criteria aren’t public, and even if the research is, not enough people understand it to know whether it was a smart use of money.

                    • A Critic says:

                      The key to avoid corruption is to have transparency, and when your criteria for the prize are objective and public, the incentive for corruption is actually less because if it does occur the odds of getting caught are considerably higher.

                      The problem of direct funding of research is there’s essentially no accountability, because the criteria aren’t public, and even if the research is, not enough people understand it to know whether it was a smart use of money.

                      Wow.

                      Last I read the feds “lose” 15 billion a year. There’s plenty of transparency – you can find plenty of evidence of millions (and more!) being stolen. I seem to recall Haliburton etc getting billions extra in no bid contracts for shoddy work. Then there were the pallets of cash that disappeared in Iraq. So on and so forth. Tons of transparency – and tons of theft. Oh yeah – then there is the Bush drug subsidies for old people – pretty sure that’s billions in unnecessary drugs (my grandmother was on 8 unnecessary drugs) and it’s fully transparent.

                      The vast majority of people in this country won’t be able to tell if the winner claims table sugar is the best antibiotic ever. A small handful of conspiracy theorists and people with sour grapes won’t stop such an easy heist.

                      The key to avoiding corruption is to avoid creating positions of power which allow people to commit crimes with immunity from prosecution.

                      And if Congress earmarks and sets aside the prize money before hand, Congress or another part of the federal government will probably steal and spend it during the development time. This is how politics actually works. It’s for the “greater good”/special pockets. It is dangerously naive to believe that government can actually be used to achieve any good end with any degree of predictability or reliability.

                      Another example of transparency: Medicaid fraud. This is a sizable industry, so big the feds keep launching major efforts to stop the fraud. They make a big difference a few years ago and announced their results in a big fancy report. Turned out the report and reduction in fraud were fraudulent. Very transparent – you can read about it from major media sources. Do you hear anyone complaining?

    • Patrick says:

      You misunderstand patents, but please do not take that as an attack. It seems a complicated issue.

      I own several patents. In each case I invented something of value, and those things were developed on my dime, using my resources and at my risk. I sell the things that use (in part) these patents. I earn a living from those things I sell, as do a number of other families nationwide who work for my firm. Our incomes derive – in part – from the things invented.

      Nobody says I need to document and patent these things. I could leave them as trade secrets, forever. There are downsides to this, including some issues surrounding the fact the law protects those who patent more than those who do not. So you take your chances that you would need to prove you got there first.

      In return for telling the world how to recreate my discoveries and recreate my invention – a foolish endeavor for anyone trying to make a living from those things – I get a limited monopoly on those inventions. It’s an exchange: my ideas to the world, in return for a limited time when only I can profit from them.

      The USA put patent and copyright into the constitution. The Founder believed in this concept. Of course, their cardinal error was making the Congress sole arbiter of the rules. Oops.

      Patents are not a “tax” on people by the government. Outside of legal and maintenance fees, the government doesn’t get squat. Patents are a method for innovators to profit from the risks they take. Companies like Apple and Oracle like to call these things “taxes”, because they don’t like to pay fair fees to those who invented the things Apple wants to sell. Again, this is the danger we face from Congress – a day when they give the largest firms automatic access to compulsory licensing from folks like us. Because nothing defines capitalism more than forcing me to give others the fruits of my labors, simply because a bigger political donor wants them.

      • asdf says:

        Yeah, the Constitution gives Congress the power to issue patents. But that power can (and should) be used at their discretion on the basis of need and only when the only other option is that much-needed things would not otherwise exist.

        And patents *are* a tax in the same sense that the monopoly priveleges granted to the East India company were a tax on the American colonies. That the government doesn’t take in revenue is beside the point. Of course the East India company “kicked back” some of the booty for the privelege, and I’m sure the same happens today in the form of campaign contributions.

      • Harold says:

        Companies like Apple and Oracle like to call these things “taxes”, because they don’t like to pay fair fees to those who invented the things Apple wants to sell.

        Without yet getting into much details, for a number of reasons software is a horrible fit for the current patent system. And “Apple and Oracle” et. al. are correct in calling them something like “taxes”.

        As for why, here’s a few reasons in very brief form:

        The US patent office is “deliberately” clueless about issuing them (well, last time I checked domain experts were not considered to be suitable patent examiners), and the financial incentives it has nowadays are to issue them without adequate examination.

        Too much prior art is not formally documented (although see above for why that hardly matters).

        Software patents in practice do not satisfy one side of the bargain, revealing your invention for the benefit of others. And because of the this (it would be simply impossible) and the last item practitioners don’t become familiar with them.

        A lot of software patents are “patenting math” (not allowed); this is due to a bad court decision which is slowly sort of getting fixed by them.

        They’re a fruitful area for patent trolls, people who unlike you aren’t using them for their own benefit. Combined with areas like the Texas “Rocket Docket” this is particularly bad.

        Any serious body of software would incorporate so many patents that if the system was strictly enforced no one would be able to write software.

        The bottom line is that all big software companies file as many patents as they can and largely don’t use them, it’s a mutual nonaggression system. And the “taxes” from the trolls are not yet impossible to bear. Small companies are just not on the radar, although if they were to get sued they’d simply have to go out of business.

        • Sebastian says:

          Software patents are a disaster. I don’t necessarily object to them in principle for true innovations, but the PTO has been so grossly incompetent in granting them that I favor repealing patent protection for software because of it.

      • Alpheus says:

        That’s the theory on how patents are supposed to work, but to the best of my knowledge, there is no study that demonstrates that patents actually increase innovation, or produce greater benefits, than without patents…but there are plenty of studies that demonstrate that patents either have no effect, or are even harmful, to innovation.

        A very good book on the subject is “Against Intellectual Monopoly”; the book looks at the economic side of both patents and copyrights, and comes against both. (You are free to buy the book on Amazon.com, or read it online, from either of the authors websites.)

        Patents are vestiges of the monopoly power originally used to attract people from other countries to work in a given industry. Copyrights are vestiges of the censorship power that governments used to control what books got published. To this day, both are athenema to liberty.

        For the record, I am a mathematician, so I work in a field where patents are forbidden, and copyrights are useless–and where more than one person, on a regular basis, reaches the same idea around the same time (where “same time” can be as long as a couple of decades). I also like to play with ideas, and I despise the fact that I can come up with an idea, develop it, market it, and then be sued, because unbeknownst to someone independenty came up with the same idea three years ago, and patented it.

        Disclosure doesn’t help, because sometimes completely different-looking ideas can be shown to be mathematically equivalent! Lambda calculus and Turing machines are two such ideas.

        • Sebastian says:

          Having spent a good deal of time in the pharmaceutical business, if there was no patents, there would be no new drugs brought to market. The costs are just too high if you can’t engage in monopoly pricing for a period of time to recoup your R&D costs, and cover your other R&D and market failures (many drugs that are approved lose money).

          There can’t be real trade secrets in pharma, because everyone has the ability to get the structure of your drug just buying it off the shelf and analyzing it. From there, it’s just a matter of figuring out how to make it, and that typically won’t take long.

          Drugs are one of the areas where patent protection is absolutely necessary to keep innovation going.

          • Alpheus says:

            “Against Intellectual Monopoly” addresses this; if I remember correctly, they may have suggested a prize system to overcome this burden.

            If I had my druthers, I’d strip the FDA the power to outright ban drugs; require pharma companies to make it clear when a given drug is still in “testing” or even just “recently approved”; and allow the pharma companies to have as much redacted data as possible from patients as possible, to look for potential side effects.

            I think it was Instapundit, recently, that had a link to an article about that one arthritis drug, that was redacted because of the link to heart attacks. Had the pharma company had access to patient records, the link could have been established much earlier than it was! (While I don’t mind people choosing between arthritis pain and heart attacks, I’d like them to know the connection as soon as possible.)

            Of course, my pipe dream would require us to radically re-think both the FDA and HIPPA…which, while it may be possible, would probably be an uphill battle.

            • Harold says:

              Well, we can get right on you program … as soon as lawyers stop for the most part running Federal and state governments.

              An even grander pipe dream? It’s hard to imagine the US thriving as long as they keep adding “structure” as Jerry Pournelle puts it; friction would be another way of viewing it.

            • Sebastian says:

              The FDA’s purpose in life should essentially be to prevent fraud. If you’re going to make a claim about a drug, it had better be true, and you better explain the downsides. I don’t think the FDA ought to have no ability to ban a drug, I just think it ought to be an exceedingly rare occurrence.

              The drug you’re mentioning is Vioxx, and I think it’s debatable whether it is really dangerous enough to ban. The Cardiac side effects were exceedingly rare. As long as a drug provider is up front with the risks, it ought to be up to patients to make the decision as to whether they want to incur that risk.

  8. A Critic says:

    I would suggest a prize of sufficient size to guarantee a hefty return on investment to any research team or company that can successfully bring a new class of antibiotic to market,

    So you want the government to rob me so you can try to win a prize, subsidize your industry, and get to live through the next plague?

    Grow up and look death in the eye. It’s coming for you and no prize, government intervention, or medicine is going to save you.

    • Sebastian says:

      So you want the government to rob me so you can try to win a prize, subsidize your industry, and get to live through the next plague?

      Grow up and look death in the eye. It’s coming for you and no prize, government intervention, or medicine is going to save you.

      I admire that you have enough courage for your convictions that you’d rather have little or no government, and go back to the days when most children didn’t survive into adulthood, and diseases that are easily cured today were rampant and widespread killers.

      But I doubt you’d even find half of a percent of the population willing to go along with that. Most everyone else is going to believe government is a lesser evil than tuberculosis, scarlet fever, strep, staph, or typhoid fever.

      • A Critic says:

        Why is regression necessary? How about we progress to a society that isn’t ruled by a small number of elite psychopaths using empty promises to fulfill popular demands to gain power? How about advancing, improving, evolving, and bettering our world instead of sticking to this primitive barbaric rule of man? Or in other words, why can’t we stop being stupid and start being smart? Rhetorical question – the answer is obviously the vast majority of people are stupid and weak serfs dependent on the state to fulfill their needs and wishes.

        “But I doubt you’d even find half of a percent of the population willing to go along with that. ”

        The percentage will greatly increase after the Great Death.

      • A Critic says:

        Re: prize. Why does it have to be paid for by taxes? Why can’t Buffet, Gates, and the public get together to fund a prize non-profit commission? Why does it have to be done in the worst way possible?

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