🧐Greater Competitive Innovation and Fewer Monopolies

High Cost of Development Favors Monopoly and Punishes Innovation

There's another problem with the increasing costs of treatment development. In the past, a genius scientist could come up with a treatment, raise a few million dollars, and do safety testing. Now that it costs a billion dollars to get a drug to market, the scientist has to persuade one of a few giant drug companies that can afford it to buy his patent.

Then the drug company has two options:

Option 1: Risk $1 billion on clinical trials

Possibility A: Drug turns out to be one of the 90% the FDA rejects. GIVE BANKER A BILLION DOLLARS. DO NOT PASS GO.

Possibility B: Drug turns out to be one of the 10%, the FDA approves. Now it's time to try to recover that billion dollars. However, very few drug companies have enough money to survive this game. So, this company almost certainly already has an existing inferior drug on the market to treat the same condition. Hence, any profit they make from this drug will likely be subtracted from revenue from other drugs they've already spent a billion dollars on.

Option 2: Put the patent on the shelf

Do not take a 90% chance of wasting a billion dollars on failed trials. Do not risk making your already approved cash-cow drugs obsolete.

What's the benefit of bringing better treatment to market if you're just going to lose a billion dollars? Either way, the profit incentive is entirely in favor of just buying better treatments and shelving them.