I'm writing this in Tom Black's car as Fred Zeleny drives towards Chicago. I'm going to a Final Fantasy concert.
So, yesterday over lunch I thought through this entry about medical patents, but I didn't get a chance to actually write it then. It was inspired by a flyer advertising re-imported drugs from Canada. (I don't think the arguments herein actually apply to Canada, though. Canada is a first-world country, and I say that if they want to have socialized medicine then fine, let them, but they shouldn't be allowed to have excessively cheap medicine—they're actually cheating the system by funding less medical development than they'd ought.)
Unlike many kinds of patents, I acknowledge that, whatever ethical issues they might raise, medical patents (by which I mean to refer primarily to patents on particular medications) serve a compelling purpose. Medical research is done because of medical patents that would not otherwise be done at all, and that (after those patents expire) benefits everyone by the invention of those drugs. The only reasonable way to oppose this that I can see is to claim that governments should fund all medical research, rather than having a market-driven research setup. I'm going to assume that the market is more efficient (i.e., likely to allocate available research funds in a way that is more beneficial to society and the world and to waste less of it in overhead) than government-funded research, or at least that such a market's existence is societally useful. If you disagree, you might still want to read on: most of my points concern the relation between different nations, rather than intra-national questions of how, exactly, those drugs are developed. Note: I'm going to assume that most research on medicine is done in the US (though if this is untrue, I think my fundamental argument is unchanged).
The obvious problem with medical patents is that, during the term of a patent, it can be infringed. In fact, poor countries have a compelling reason to do so—people are often dying because of the lack of these drugs. The real problem with this situation is that the poor countries aren't being irrational. There's no logical argument to convince them not to infringe these patents—it really is in their interests to infringe them, assuming no artificially imposed repercussions. So my first thought was that the US needed to be ready to enforce its patents, by means of trade sanctions or even going to war if necessary against poor countries that flagrantly infringe our medical patents. This would seem necessary because it's the only way to enforce the existence of a market for the results of medical research (as distinct from actual production of the drugs, which I'm assuming is a much cheaper process). And even poor countries benefit from the existence of such a market, since they get the benefits of the drugs after the patent expires (I think medical patents might last only 7 years?), even if it is in their interest to infringe individual patents.
However, then it occurred to me that these poor countries wouldn't be paying the while-patent-is-in-effect price for these drugs anyway—they might like to, but they just don't have the money. So, given that the First World can finance this drug development, what would be the harm in allowing Third World countries to just use them for the cost of physically manufacturing the drugs?
The problem is re-importation into First World countries, which would drive prices down and make the patents effectively moot. Even if re-importation were illegal, it would be extremely difficult and expensive to prevent smuggling. There's also a problem that classifying countries into First and Third World might be politically charged and controversial.
The more I thought about it, the more I became convinced that the solution was something like this: the US government should apply selective mercy in patent enforcement, and make it very clear when they're doing so. This makes the Third World countries realize that no, we're not just being jerks trying to oppress them, but drug development really does cost a huge amount of money and the market for that has to be created somehow. In deciding whether to enforce a given patent, factors I would consider would include severity of the condition treated (both in terms of threat to life and number of people affected), availability of other treatments, and cost of developing the drug (the more expensive it was to develop, the more likely that the patent should be fully enforced). In order to prevent drug companies from pouring all their research dollars into treatments for trivial conditions so their patents don't get confiscated, the lost profits from these forcibly open-sourced patents could be given to the company from which the patents were taken from a fund generated by a special tax on drug companies for that purpose. This spreads the cost over the entire industry, which I think is at least reasonably fair. (I recognize that if these patents could be “bought off” privately rather than the government having to do it, this system could be almost entirely market-driven. Suggestions on how the funding for this might be obtained are very welcome.)
Of course, this probably does still mean that any conditions that affect the Third World disproportionately more than the First World won't get as much research funding, but I don't really have a problem with that. In economic terms, it's clearly a fact that an average citizen of the First World is simply worth more than an average citizen of the Third World. To say that people are more than their economic value should not be to deny that they have an economic value; I think that people who would say this latter are usually just confused or dogmatic. Furthermore, I think that my system is manifestly kind to Third World countries—it allows them to freeload, sometimes, it just makes it more explicit when and how they're freeloading.