Prize Pill

Bernard Sanders introduces the "Medical Innovation Prize Fund Act of 2007" and it's a good idea. Insofar as one wants government action to provide pharmaceutical companies with a profit boost as a means of encouraging R&D efforts, it makes much more sense for the government to do this by giving the company a big pile of cash than to do it by using the law enforcement apparatus to grant the company an exclusive monopoly over the right to the medicine. Obviously, there are some administrative difficulties in involved in organizing something like this properly but aside from all of its other inefficiencies, intellectual property is an incredibly costly way of dealing with life-saving technologies since the value of new drugs to some classes of consumers will fairly frequently exceed their ability to pay.

See Alex Tabarrok for more, though he's too kind to the drug companies.

Photo by Flickr user Rselph used under a Creative Commons license