This paper deals with the question of how to price drugs for tropical diseases. The thesis defended in the paper is: (i) there should be no legal constraints on the profits pharmaceutical companies can make on their products for tropical diseases. In essence, (i) expresses the idea that drugs for tropical diseases should be treated as any other product on the free market and that the producers of these drugs should be allowed to sell their products at whatever price the market can bear. The main argument in favour of (i) is first outlined. Five common arguments against (i) are thereafter discussed, and it is argued that all of these fail in their intended purpose.
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↵i A distinction is here assumed between innovations and scientific discoveries. Rosenberg’s argument entails that there are some basic scientific discoveries that should not be allowed to be patented.
↵ii With respect to drugs for tropical diseases, the point is that once society either renegades on an already existing commitment to offer patent right protection for drugs for tropical diseases or decides that no such protection will be offered in the future, the effect will probably be that pharmaceutical companies will scale back on the research and development of drugs for tropical diseases.
↵iii Other examples might of course have different values assigned to the various variables. However, given that the abrogation of a patent right has a chilling effect on investment in innovations and that the total quantity of arable land and refinable minerals, together with the unequal distribution of welfare among an unvarying number of persons, remain constant, there will be a point in the future where the costs of abrogating a patent right exceed the immediate benefits of such a move.
↵iv The antimalarial drug Lariam (mefloquine) manufactured by Hoffman-LaRoche is, for example, a counterexample to 1.