> We just also let that research be locked up with patents and published in pay-to-read journals, because apparently "we pay for your R&D" is not enough "incentive" to get people to invent/develop new things, we also have to give them additional millions/billions of dollars in later sales.
In the R&D sector, the government is an investor like any other. Imagine a VC that offered you the following terms: we'll pay your salaries (which we'll heavily scrutinize) while you get your product a third of the way towards being commercial ready. After that, you can keep commercializing on your own dime, but we'll own anything you developed up to that point and give it away to your competitors for free.
Would anyone with other options take that offer? But that's exactly the offer the government would be making if research initially funded by government grants wasn't eligible for patent protection.
Flip your argument around: suppose a startup walked into a VC firm and said "we want you to fully fund us for our first couple years, which will be expensive, and in return we expect to give you nothing -- no equity of any sort, no shares of future profits, nothing".
Would anyone who had the ability to invest in something that actually provides a return take that offer?
But that's exactly the offer researchers -- many of whom work at publicly-funded universities -- are currently making.
Except you can’t flip it around because it’s not symmetric. From the point of view of the investee, the government is just another investor and can’t demand more onerous terms. From the point of view of the government, it’s not just another investor, because it can capture public benefits private investors cannot.
At most, you might be able to argue that the government should be able to seek an equity stake in return for funding R&D. That’s not enough to support your original point however, which was that government funded research should be in the public domain.
the government is just another investor and can’t demand more onerous terms
Companies with different classes of investors, who have different rights, are common.
can capture public benefits private investors cannot
And if that stops happening -- as it is, when government-granted monopolies are used to gouge -- then it's time to make the companies involved suffer a bit until they remember where their R&D money came from.
At most, you might be able to argue that the government should be able to seek an equity stake
This lacks imagination.
You could impose limits on the term and scope of patent for inventions resulting from public funding. You could prevent patenting of, say, modified formulations of a publicly-funded drug whose only purpose is to secure a new patent and another term of monopoly. Or you could make publicly-funded patents expire sooner. Or you could impose price caps on patented products derived from public funding, until the amount of "lost" profit from the caps equals the amount of public money put in. Or you could use tax penalties against companies who price-gouge -- say, if you acquire an unpatented drug, obtain a monopoly on its production and start jacking up the price, you immediately get taxed into bankruptcy.
There are all sorts of possible ways to do something here.
> Companies with different classes of investors, who have different rights, are common.
Sure. But simply funding costs for a few years of a project that’ll take a decade to bring to market isn’t really that attractive, and the government can’t expect to get a lot of rights in return.
> monopolies are used to gouge
“Gouging” is a nonsense concept. Many things that people consider “gouging” are actually economically efficient (surge pricing, raising prices during disasters, etc). So using perceptions of “gouging” as a metric for setting policy is a terrible idea. What you really care about is whether drug companies are seeing excessive ROI, which would mean the patent monopoly is creating greater incentives than necessary to attract investment relative to the other investment opportunities in the market. And drug company ROI is high, but not out of line with other high risk, high tech, capital-intensive industries.
This is orthogonal to the issue of who pays. I think the government should pay. It shouldn’t pay too much, of course, but that should be gauged by reference to ROI, not whether prices for specific drugs “feel” too high to lay people or politicians.
In the R&D sector, the government is an investor like any other. Imagine a VC that offered you the following terms: we'll pay your salaries (which we'll heavily scrutinize) while you get your product a third of the way towards being commercial ready. After that, you can keep commercializing on your own dime, but we'll own anything you developed up to that point and give it away to your competitors for free.
Would anyone with other options take that offer? But that's exactly the offer the government would be making if research initially funded by government grants wasn't eligible for patent protection.