How many potential drugs, each year, have not been developed, because of the difference between that cost and the potential cost in a zero-regulation environment? Thousands? Millions?
A better question would be "How many potential drugs have not been developed because they cannot be patented?"
Oh, and a zero regulation environment? There's always going to be liability for "your drug killed people". In a zero regulation environment that cost is going to be incredibly high. Or your placebo drug is going to CAUSE economic damage by killing productive workers.
Your model of regulation/no-regulation is far too simple. As always, there is a sweet spot somewhere in the middle where both the public (consumer) and the corporation (producer) benefit.
And as always, if the cost of new drug (say an AIDS cure) is prohibitively high, a government may subsidize the process. Or even simply provide capital incentive (say a $2 billion winner take all prize, like an X-Prize for drugs).
> A better question would be "How many potential drugs have not been developed because they cannot be patented?"
It depends on why they couldn't be patented. There's a nasty interaction between regulatory delay and patent terms starting at application which means that drugs that don't have huge markets don't get developed, but I'm pretty sure that you're not referring to those.
Let me guess - you think that there are substances which are unpatentable because they fail the novelty test but have great utility as drugs. If said utility is newly discovered, that satisfies the novelty test. If said utility is "folk medicine", then the only thing stopping anyone from selling them as drugs is the regulatory testing costs.... (Drugs don't have to be patented.)
Well, yes, there are anti-cancer medications that have been used in clinical trials with great results, but fail the novelty test. If something is an OTC generic with an expired patent, its a little hard to get the genie out of the bottle. As long as they're not strictly encouraging the purpose of drug purchase to treat the "novel" discover, its legal, even if they copy your "applicator", dosage information, etc.
The big scramble to re-purpose drugs is while they're still patented by one manufacturer. Once someone like Mylan is manufacturing it as a generic, doing research for "novel" forms is only helping your competition.
I agree. However, governments, who have a mandate for public welfare, can fund the medical/clinical trials for OTC generics. Countries with socialized medical systems are already doing that.
Combine that with the headstart of stem cell research the UK and Germany has, and we'll like see some cost-saving medical breakthroughs coming out of that part of the world in the next 3-5 years.
Largely because of the costs of FDA regulation compliance, it costs ~$1-2 billion to develop the average new drug. http://en.wikipedia.org/wiki/Pharmaceutical_industry#The_cos...
How many potential drugs, each year, have not been developed, because of the difference between that cost and the potential cost in a zero-regulation environment? Thousands? Millions?