“The Oxford vaccine is… striking, since the point was to pay researchers, but not to rely on patent monopolies to generate large profits.” – Economist Dean Baker
by Alan Macleod
Part 2 - Good for people, bad for profits
Today’s good news will doubtless challenge corporate pharma’s profit margins (Moderna’s share price has more than quintupled since the beginning of the year), but it also challenges corporate pharma’s logic and justification for high drug prices in the first place.
The pharmaceutical industry argues that research and development are extremely expensive, that market competition and profit breed innovation, and is the only way to ensure new drugs are developed. Yet examples like the Oxford and the four separate Cuban vaccines in development suggest that this logic is faulty, at best.
“This should really encourage some rethinking of biomedical research, as should the Moderna vaccine,” Dean Baker, senior economist at the Center for Economic and Policy Research told MintPress today.
There was this absurd view that somehow we could only get good drug development with the lure of a patent monopoly. The Moderna case is noteworthy because, basically the government paid the full cost of developing the drug upfront. We did also give them patent monopolies, but since the government already paid for the research, this was a handout to the company.
In reality, a huge amount of medical research is actually paid for by the taxpayer, as Baker has already shown, only becoming the intellectual property of private corporations once it is profitable.