>Yes, if you are not confident that you can keep a trade secret then the patent becomes the better option. (Isn't that what I said before?) "Greater than 50% chance" is not what I would call "confident".
Change it to any arbitrary likelihood below 1. The expected value of a drug during the length of the patent maybe arbitrarily greater than the expected value of a drug after that time period due to reasons other than duplication (alternative unrelated treatments etc..). If it is expected that drug will make nearly all of its total value during the length of the patent, then even a 1% chance of duplication means that the expected value of taking a patent is higher.
Such an extreme disparity between expected value during the patent length and after isn't even necessary when you factor in the additional costs of attempting to maintain a trade secret.
>It doesn't change the fact that patents only have a positive net expected value to the recipient in the situations where the public is expected to lose by granting a patent rather than having the knowledge kept as a trade secret for a time. The interests of the applicant and the public are diametrically opposed; if the patent applicant wins, the public loses.
This is wrong because it ignores the additional costs (both direct and indirect) of maintaining the trade secret.
>We've granted a 20-year monopoly
Minor point--most drug patents have an effective date of about 10 years because of the time it takes to bring a drug to market.
>Maintaining tight control over the distribution of the drug only gets you so far, especially when the underlying research is already public knowledge.
Without the potential benefit of patent protection, we'd almost certainly see research become less open to begin with.
>Trade secrets, unlike patents, don't block independent discovery, and only the rarest and most expensive drugs would warrant complete control over the supply chain.
Probably, but those drugs would become immensely more expensive, or the reward available to an individual company for developing them would go down. Every novel drug would likely warrant some extra level of control (and expense).
>though it would reduce the profitability of individual pharmaceutical companies.
The direct cost of maintaining trade secrets would effectively act as a tax on all pharmaceutical companies doing novel drug development. As would the direct cost caused by duplication of drugs during what would have been the patent protection period. Add in the indirect cost of decreased openness, and the only way to maintain the exact same level of drug research we have today without patents would be to increase public funding for drug development.
I think that's probably a better system to be honest.
Change it to any arbitrary likelihood below 1. The expected value of a drug during the length of the patent maybe arbitrarily greater than the expected value of a drug after that time period due to reasons other than duplication (alternative unrelated treatments etc..). If it is expected that drug will make nearly all of its total value during the length of the patent, then even a 1% chance of duplication means that the expected value of taking a patent is higher.
Such an extreme disparity between expected value during the patent length and after isn't even necessary when you factor in the additional costs of attempting to maintain a trade secret.
>It doesn't change the fact that patents only have a positive net expected value to the recipient in the situations where the public is expected to lose by granting a patent rather than having the knowledge kept as a trade secret for a time. The interests of the applicant and the public are diametrically opposed; if the patent applicant wins, the public loses.
This is wrong because it ignores the additional costs (both direct and indirect) of maintaining the trade secret.
>We've granted a 20-year monopoly
Minor point--most drug patents have an effective date of about 10 years because of the time it takes to bring a drug to market.
>Maintaining tight control over the distribution of the drug only gets you so far, especially when the underlying research is already public knowledge.
Without the potential benefit of patent protection, we'd almost certainly see research become less open to begin with.
>Trade secrets, unlike patents, don't block independent discovery, and only the rarest and most expensive drugs would warrant complete control over the supply chain.
Probably, but those drugs would become immensely more expensive, or the reward available to an individual company for developing them would go down. Every novel drug would likely warrant some extra level of control (and expense).
>though it would reduce the profitability of individual pharmaceutical companies.
The direct cost of maintaining trade secrets would effectively act as a tax on all pharmaceutical companies doing novel drug development. As would the direct cost caused by duplication of drugs during what would have been the patent protection period. Add in the indirect cost of decreased openness, and the only way to maintain the exact same level of drug research we have today without patents would be to increase public funding for drug development.
I think that's probably a better system to be honest.