We’ve noted before that we’re unimpressed with Ms. Mazzucato’s understandings of the economic basics. But this particular complaint of hers strikes us as being laughable.
The NHS is facing ever growing challenges, not only because of recent cuts but also due to steadily rising expenditure on drugs. Our health innovation system is not serving the people that fund it; instead it provides monopoly profits for large pharmaceutical companies.
Well, yes, monopolies are bad things. Except when we deliberately create them to solve some other problem. Here it’s the public goods problem of knowledge creation. Once we know that aspirin cures headaches then everyone can go off and make aspirin. But the people who proved this - and in the modern world, more importantly, the people who spent $1 billion to prove this to the licencing authorities - can’t recoup their billion. Thus the billion never gets spent, we never do know and the authorities never issue the licence. We institute the time limited monopoly to get over this problem.
Certainly, there are other possible models out there. Reducing that regulatory cost is the one that strikes us as being most useful. Perhaps the model we use isn’t the right one from that palette of options. But whatever ones’ views there this is still a laughable complaint:
The global health innovation system lacks direction to tackle the areas of greatest need. Research shows that diseases that are not potential growth markets are largely ignored. Between 2000 and 2011 only 4 per cent of newly approved drugs were for neglected diseases that affect lower and middle-income countries, while 78 per cent of new medicine patents corresponded to drugs already on the market.
We’re against monopolies but we’re also against that market competition - other drugs to treat the same conditions - which reduces monopoly?
Is it too much to ask that a critique of this modern world at least be internally consistent?