Intellectual property kills

I.

Imagine you're a hospital administrator. There's a pandemic going on; your hospital is rapidly reaching capacity; and you need to have enough space to make sure you don't have to turn people away.

There's a drug that can shorten hospital stays (although it doesn't improve outcomes). It's one of two drugs that's been shown to have an effect on the pathogen causing this pandemic. Shorter hospital stays would take some pressure off of your hospital. The staff are tired and overworked.

The drug costs USD$2340 per treatment course.

Well, I misspoke. That's the cost for someone covered by a government healthcare program—even though at least one government invested at least $70 million into its development. If you're covered by private insurance? $3120. Even if you're in a developing country with a medical system that might be under even more strain, you'll probably pay $600.

Wouldn't you expect some companies to step in and undercut these prices? How many companies produce this drug?

Just one.

For the most part, if any other company tries to produce the drug, it will get hit with hefty legal punishments. This one company's monopoly is legally protected.

Then, one country buys up nearly all the supply of the drug for the next three months.

Guess you're not shortening any hospital stays this quarter.

II.

This is a real thing that happened just a few months ago. The drug is remdesivir. The company is Gilead. The country that invested heavily in the drug's development and then bought up nearly all the supply for three months is the US. Here's one link. Here's another. (Here's a third, to complete the rule of threes.)

How could this happen? Of course, there's a complex web of factors leading to this—and I want to focus in on one in particular because this keeps happening.

We are constantly granting artificial monopolies to drug companies. In general, when you have a monopoly, it's able to keep prices high, and if that one company collapses, you end up with a shortage. It's no surprise that that's exactly what's been happening.

If we can shorten hospital stays, hospitals will be able to treat more people, so fewer people will die. This is even more crucial for drugs that are actually effective in treating diseases, preventing deaths, and improving quality of life. Instead, we pay companies to develop drugs and then pay them again to get the products we funded.

Some people say artificial monopolies are necessary to encourage innovation. These are almost certainly many of the same people who say competition is necessary to encourage innovation. They seem to have forgotten that there are other ways to incentivize innovation—tax breaks and public funding, for instance. And plenty of research is the product of the government, not private companies. If anything, tax breaks are the best way to incentivize both innovation and affordability: a company which receives tax breaks will be able to set lower prices and get the same profit as if it didn't receive tax breaks, and if it raises prices high enough, another company will be able to swoop in and offer the product for a lower price.

III.

Prescription drug patent laws have plenty of competition for the title of Most Morally Objectionable Intellectual Property Law.

Think of the enthusiastic amateur inventor or the early-career scientist who's short on cash. If you're not affiliated with a university, it is often a pain to get access to research papers (JSTOR seems to think I have $30 to fork over for every paper). In economic terms, we call this a loss of productivity: people who want to do and could be doing productive work are prevented from doing so by a lack of resources.

Academic publishers don't even pay scientists for their work—neither for research nor for peer reviewing. The economic costs of closed-access journals are strikingly absurd: some "analyses [...] suggest that converting the entire publishing system to open access would be worthwhile even if per-article-costs remained the same—simply because of the time that researchers would save when trying to access or read papers that were no longer lodged behind paywalls."

But if you're that inventor or that scientist and you know the right place to look, you can potentially find what you're looking for without paying an arm and a leg (this is another economic cost, because people who don't know where to look are being shut out and prevented from being productive). What's the right place to look? Sci-Hub, a website that hosts research papers and makes them available for free if they're in the database. The one small problem? Sci-Hub is considered illegal because it purportedly violates copyright.

The old anti-copyright saying is true: Information wants to be free. The world is richer (in all senses of the word), more beautiful, better when we have access to more information, when we can draw on the full range of human knowledge in our endeavors.

And, from a purely strategic point of view, if you want your ideas to spread, don't make people pay to view them. Make it as easy as possible.

IV.

Laws are meant to promote human flourishing and the greater good. If your laws on net cause deaths and lower quality of life—whether directly, through unavailability and unaffordability, or indirectly, through the stifling of innovation—then you are not doing laws right.

The case for intellectual property is at best a case for the status quo. You'd have to have a pretty strong case to argue against fewer deaths, less suffering from drug shortages and monopolistic high prices, and the unfettering of humanity's scientific enterprise.

A few decades ago, the film industry made a PSA attempting to discourage film piracy. They said: You wouldn't steal a car. Why would you steal a song? (Well, a car can't make infinite copies of itself, for one.)

I ask the supporters of artificial monopolies this: You wouldn't kill someone with a gun. Why would you kill them with a patent?