Comments on: Intellectual Echo Chambers

By: Antoni Jaume

Antoni Jaume — Sat, 16 Oct 2004 14:41:57 +0000

Holsclaw, you lier. You purposely mix in my case a situation that my parenthetical remark discards. The fact that cases D, E, F, G, thru Z and whatever else may require law protection is different from my C case. If two pharmaceutical laboratories target one disease, they perfectly can arrive at the same drug without any information sharing, voluntary or not. That same problem arise with computer algorithms if they are patented. DSW

By: Robin Green

Robin Green — Thu, 14 Oct 2004 03:02:26 +0000

after examining your book on theme Z, I write a book on theme Z which relies substantially on the discoveries you revealed in your book on theme Z. Which of course is quite legal.

By: Senastian Holsclaw

Senastian Holsclaw — Wed, 13 Oct 2004 19:08:39 +0000

In the case of generics or knock-offs “without any input from you” isn’t correct. It would be more correct to say “after examining your book on theme Z, I write a book on theme Z which relies substantially on the discoveries you revealed in your book on theme Z.”

By: Antoni Jaume

Antoni Jaume — Wed, 13 Oct 2004 17:24:35 +0000

Baa, the question with pharmaceutical intellectual property is not one of your two cases, but, in my view, a third case: Case C: I write a book about theme Z, and Mr. X write another book on theme Z (without any input from you). We say “we want to preserve the incentive to book writing” and institute a right to property. If Mr. X publish his book, he goes to jail. DSW

By: baa

baa — Wed, 13 Oct 2004 13:22:02 +0000

Henry, It’s true that (many) libertarians will argue for property rights are natural. But as Nicholas suggests above, not all. Further, it’s not clear that a “natural” definition of property rights will necessarily treat IP more harshly that “regular” P. You are of course right that pharmaceutical IP is a monopoly of use protected by state sanctions. But so, I think, is regular P. John B, I’m not sure you correctly capture most people’s intuitive moral beliefs. If I re-typed “Prisoner of Azkaban” and started selling my own copies, I imagine many people would think I was ripping JK Rowling off. What’s at issue here is a strong dichotomy between intellectual property and physical property. I’m looking to see this difference justified. John Quiggin has previously justified the difference based on the status of IP/ideas as “public goods.” Also, as an aside, one of the properties of the new reimportation bill (the Snowe bill, I believe) is that a) it allows importation from the EU (definitely a key pharam market) and it attmepts to prevent pharma from cutting off supply to ex-US markets. Reimportation under that set of rules really does seem threatening to pharma, requiring them to chose between a massive price increase in the EU/Canada (and the backlash that would entail), or losing the profitability of the US market. Sebastian, Your supposition about the risk-averseness of pharma companies on patent issues strikes at least this industry insider as 100% correct. Of course, it’s very hard to distinguish pharma fear of patent breaking and simple hard bargaining by large buyers. In practice, pharma has resisted both (hence the attempt to restrict the power of large buyers in the new Medicare bill. Just as an aside, I have anecdotally seen convergence of the price at launch for new drugs in Canada and the US.

By: jet

jet — Wed, 13 Oct 2004 13:01:52 +0000

Someone needs to make a textbook out of Sebastian and Henry debating and use it to teach economics.

By: Sandwichman

Sandwichman — Wed, 13 Oct 2004 02:00:10 +0000

The thing that struck me about the piece from the NYT is that the phrase “intellectual echo chamber of economists” would appear to have come from PhRMA’s own budget documents, unless that was a disingenuous juxtaposition of quotes by the article’s author. Those on this thread who have commented on the echo chamber remark appear to take such a formulation in stride, as if participating in a closed discourse is o.k. as long as you sincerely believe in what you’re getting paid to say. It’s not o.k. It’s pernicious. I’ve worked as an expert witness in arbitrations and that’s not the same as the public relations intellectual echo chamber. In a legal process the other side has its expert witnesses, too. But the point of an echo chamber is to create the illusion that THERE IS ONLY ONE SIDE. Anyone who sincerely believes (“in accordance with their principles”) that the other side, whoever they may be, has no case whatsoever and doesn’t deserve even an opportunity to be heard is most likely a dolt and a hack to begin with. Or perhaps has become one with practice. The problem with politics today… the problem also with the academic disciplines and with the entertainment/information industry… that is to say the problem with public discourse is either that it has become or has never evolved from a series of closed intellectual echo chambers. This perhaps also explains why litigation is so rampant. At least in the legal process one has a formal, procedural right to have experts for one’s own side present their case. Might not one be innately suspicious of self-described “libertarians” who flock together in collectives of remarkable uniformity?

By: Henry

Henry — Wed, 13 Oct 2004 01:01:20 +0000

Thanks Nicholas for the clarification.

By: John Quiggin

John Quiggin — Wed, 13 Oct 2004 00:35:53 +0000

We had a lengthy debate about these issues here, which I think got a bit further towards clarifying the question than has this one.

By: anon cynic

anon cynic — Wed, 13 Oct 2004 00:18:41 +0000

I think I see something of a prisoners dilemma here—it’s in every country’s short-term interest to either not enforce drug patents or negotiate low prices. But if nobody enforces patents, in theory, innovative drugs like Via_gra and Pro_pecia (names mangled due to ct’s spam filter) won’t be produced. Whether alternative systems of funding, such as the US government funding something like half of US pharma research through NIH and the state university systems, can produce useful drugs is unknown. Fortunately for the rest of the world, the system has an out: the US can’t refuse to enforce drug patents because drug companies own much of Congress, and they can’t negotiate lower rates because (unlike the rest of the major drug-consuming countries) they don’t have a national healthcare system. So, the US is the perpetual patsy under this system. The reimportation ban is necessary to the continuance of this system. Sebastian proposes no alternative but that this should continue indefinitely. I have another idea: The US lifts the reimportation ban, and US prices drop. The pharma companies either convince the world that the patent system is the only way to fund drug research, or they fail and the world tries some other funding system. Given the advertising budgets of drug companies, I have no doubt that they will succeed. They have allies in anyone else who depends on government monopolies, such as proprietary software companies, movie and record companies, etc.

By: Nicholas Weininger

Nicholas Weininger — Wed, 13 Oct 2004 00:09:23 +0000

The claim that libertarians all, or almost all, view property rights as natural rather than efficiency-based is false. Many of us would reject that dichotomy completely, for one thing. For another, there are plenty of consequentialist libertarians, some quite radical, who think about property rights in efficiency terms as well as natural rights terms. See for example David Friedman, whose Law’s Order contains very nice discussions of the efficiency of both traditional property law and IP law, and who is a serious, radical anarchocapitalist. At the other end of the radicalism spectrum you have people like Hayek and Eugene Volokh, of course. Also there are some libertarians who believe IP rights are natural. Among these are some who believe that since they are natural they ought to be perpetual and complete. For an extreme example of this look up Andrew Galambos. That said, IP rights do tend to be much harder to defend than ordinary property rights from a libertarian viewpoint. Which is why there are very large factions on both sides; it’s one of the Big Internal Debates, like abortion or the Iraq war. For a nice summation of the anti-IP position see Stephan Kinsella’s stuff at http://www.stephankinsella.com.

By: asg

asg — Tue, 12 Oct 2004 23:45:13 +0000

Just as food for thought, here’s a fairly recent Cato Institute policy analysis endorsing the lifting of the reimportation ban (although the author argues that it can be done right or done wrong, and suggests that the Senate bill likely to pass would be the latter)—http://www.cato.org/pubs/pas/pa-521es.html … and here’s a shorter article with the main points: http://www.cato.org/research/articles/pilon-041011.html

By: Sebastian Holsclaw

Sebastian Holsclaw — Tue, 12 Oct 2004 23:42:17 +0000

“If Canada were then to break the patents – even if no WTO rules were broken – the US would have a strong moral case for banning the import of pirated drugs from Canada (just as it bans the import of pirated clothes from Malaysia, while allowing legitimate clothes).” And the company would care about the strong US moral case while its profits went down the tubes while it tried to push the bills through? If you don’t think that is relevant, I suspect you don’t understand the idea of profit very well. I note also you rely on ‘moral’ case now….

By: john b

john b — Tue, 12 Oct 2004 23:29:11 +0000

No large company could afford to take the risk that a major government would take such an action and bankrupt them unless the company had no other choice. Since, at the moment, they can charge Americans for the cost of research, it would be foolhardy to risk otherwise. Yes, I do work for a company; it’s one of the leading global healthcare consulting firms, as it happens. Anyway, your point isn’t relevant. If your conjecture that refusing to sell to the Canucks would be the only way that pharma companies could maintain profitability in the US if cross-border imports were allowed is true, then they would refuse to sell to the Canucks. Canada is a nice market to have, but it’s not one of the global pharma firms’ 7 key target markets. If Canada were then to break the patents – even if no WTO rules were broken – the US would have a strong moral case for banning the import of pirated drugs from Canada (just as it bans the import of pirated clothes from Malaysia, while allowing legitimate clothes).

By: Sebastian Holsclaw

Sebastian Holsclaw — Tue, 12 Oct 2004 23:09:44 +0000

“I thought the most recent WTO round, and NAFTA, both bound participants to respect IP rights. Hence China’s crackdowns on piracy, and the reluctance of developing-world pharma companies to produce generic versions of patented drugs.” I think you are incorrect. That has been the sticking point for all sorts of talks, but I am completely unaware of any such agreement that would minimize the effectiveness of such threats as are the subject here. Which would tend to mean that the WTO would not impose or allow sanctions. “They have already threatened to break the patents. Which doesn’t necessarily mean they will.” Do you work in a company? No large company could afford to take the risk that a major government would take such an action and bankrupt them unless the company had no other choice. Since, at the moment, they can charge Americans for the cost of research, it would be foolhardy to risk otherwise. I would put the risk at somewhere in the 30-40% range, but even if it were only 5% it would be an unacceptable risk for a company.