In article ,
Dave wrote:

On Wed, 27 Oct 2004 10:22:26 +1100, Peter Wiley
said:


Then manufacturers could compete on their production systems and R&D
firms would make money. Separate the 2 in other words.

Bad idea. Administered prices are inherently inefficient in the longer run.
This would be just another case of administered prices.

Huh? What administered pricing system? You're dragging in a red
herring. I said nothing about price controls of any kind.

What you said was:

Say for starters, 100X the cost of
all work done to achieve a success plus a percentage royalty on sales,
with open licensing to any manufacturer with the QA needed to produce.

Who would set that 100 number, and who would fix that percentage? If you say
the licensor and licensee, the answer is that they're free to do that now.
If it's the licensor and licensee, you've got administered prices in one
form or another.

Sigh. You really do have a failure of the imagination, don't you?

There are 2 payment methods possible for drugs that occur to me. First,
let's address the argument that the hit rate is so low that cost of
failures needs to be loaded onto the few successes. Agreed. Now, how to
pay for that? One method is to reimburse the entire cost of R&D at some
multiple that covers the cost of the failures, plus a healthy profit.
You now have your R&D money back, plus some.

Second, ongoing revenue streams. For simplicity, assume that licensing
production to manufacturers who meet QA standards is both mandatory and
that the percentage of wholesale price paid as a royalty is fixed so
you can't charge one manufacturer more than another one. Now,
manufacturers can produce the drug using the most efficient processes
they know and sell into a competitive market against other
manufacturers. If Company A produces & wholesales for $10/unit, the
discoverer gets $10/x payment. If manufacturer B produces & wholesales
for $5/unit, the discoverer gets $5/x payment. Remember they've already
got their R&D money back plus profit.

As I said I fail to see the price maintenance over & above the minimum
needed to pay the margin and hell, if a company wanted to give drugs
away for free, the payment would be nothing. I can hear your screams
now....

I note that you have nothing to say WRT innovation happening regardless
of patents or protection of IP in software. I take that as an
acknowledgement that I am correct and that you are incorrect.

That's what we call a non-sequitur. I simply didn't comment on the issue
one way or the other.

As to whether innovation would occur without patent protection, the answer
is undoubtedly yes, to some extent, particularly where there is related
proprietary know-how, but probably not as quickly. Money is a powerful
motivator.

Hmmm, explains why MS Windows is a superior o/s to linux. Money is a
powerful motivator, true, but this does not necessarily translate into
a better or more efficient product. Especially in software..... I've
worked for s/ware firms who were very good on their engineering &
testing - my last employer in the USA was such a firm. I've also worked
for the other type where one way of making money was cutting costs,
corners and everything else to get product out the door.

Had I commented on software protection, I might have suggested among other
things that the market share of Open Office is miniscule, and even
development in that area is driven in substantial part by the demand for
programs protected by copyright.

Fail to see the relevance. The demand for MS Office is set partially by
Microsoft's proprietary and changing document storage formats. Their
market share is slowly eroding. Now if they had been able to patent the
idea of a word processor........

Anyway, patents are a Govt sponsored/enforced restaint of trade from
which the public is supposed to derive a benefit that outweighs the
loss. It's getting debateable if the benefit is commensurate with the
loss from the restraint in a number of areas. If company A can
manufacture/sell a drug for $10/tab and company B does the same thing
for $75/tab, I'm willing to bet that A is still making a profit and B
is making its sales only by suppressing competition from A. As a
practical matter this can't last. You can argue all you like, but just
as the music industry is being dragged kicking & screaming by
technology they can't control into a future they don't want, other
industries will be as well.

Boring now.......

PDW