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July 18, 2006
Getting and Spending
Well, we're now into earnings report season in the drug industry. Not that we notice much in the labs, mind you, but the stockholders do sit up and pay attention. Profits seem to be up, which prompted a colleague of mine to wonder today when the first New York Times story will appear noting this with worry and disapproval. They have some people that I enjoy reading, but a tone does tend to creep in that suggests that any profitable industry must necessarily be extorting The Masses.
Well, I can cheer them up. The thing about drug industry profits is, they're pretty much all based on wasting assets. The drug business is an endless treadmill. Most businesses have this problem to some extent, but it's very explicit in our case. When your big patent runs out, the music stops very abruptly these days, so you'd better have something to replace it.
But you know, I'm not complaining about that. Patents should have defined lifespans, although we can argue about how to set them. Knowing that they're going to go away, though, keeps us moving. (For similar reasons, I wish that copyright hadn't been extended a few years ago). If we had big whopping patent terms, the temptation to just sit around and roll in the money would be too great. The pace of discovery would slow. I see it as the function of government to discourage that kind of inertia, although not by just yanking all the cash away, which position I realize also has some support.
Nope, it's the middle ground for me: enough time to make good money, but not so much time that everyone becomes too lazy. Here's the question, though: stipulating that that's what we want, are the current patent terms too short, too long, or on target?
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