Patent and Profit As Promoting "Wasteful" Scientific Efforts

While espousing why he thinks patents are bad overall, Dean Baker makes the following point in Rigged  [Emphasis mine]:

For example, Merck and AbbVie, along with several smaller drug manufacturers, are rushing to market alternatives to Sovaldi as a treatment for hepatitis C. In the context in which Gilead Sciences, the maker of Sovaldi, has a monopoly on effective treatments for hepatitis C, this sort of competition is highly desirable because it will lead to lower prices. However, if Sovaldi were being sold in a free market at $500 to $1,000 for a course of treatment, there would be little incentive to invest research dollars finding treatments for a condition for which an effective drug already exists. If drugs were sold without protection, research dollars would usually be better devoted to developing a drug for a condition where no effective treatment exists than developing duplicative drugs for a condition that can be well-treated by an existing drug.

He is right that competition in biotech for markets of established drugs is essentially wasteful. You could make a similar argument for any kind of industrial research lab as well.

Any time someone is doing research in secret, there may be other researchers who are duplicating those secret efforts.

Science advances best when it is cooperative. The profit motive introduces wasteful competition.

This is why the mathematicians' polymath project was such a success in some of their collaborations. It was open and directly accessible - no peer review, etc.

Baker's idea is also reminiscent of how the chess engine development took off once developers started open-sourcing and sharing their code.

But I have to object when Baker quotes $500 to $1000 as the "free market" price of Sovaldi. He's clearly not accounting for the development costs.

Baker favors a model where government contracts researchers directly and then subsequently claims any rights on their inventions. He says that such a model is already being used by the defense industry. Will you get as many biotech inventions once the research is essentially socialized? I would like to think so but I have my doubts.

Also consider the following. Because of Apple's dominance in the smartphone market, Samsung decides to enter the smartphone market by . Based on this, should we conclude "oh well, the smart phone is really a solved problem; Samsung's dollars would really be better spent elsewhere"? Should we have a consistent reaction to competition in drugs and smart phones?

I think not. I think that drugs are different from smartphone's in that they can effectively cure a disease as to make any further research superfluous. Smart phones can be improved in a lot of different ways. These improvements would be spurred by competition; whereas in drug development, it's hard to develop on your competitors' ideas due to patent protections.

Nonetheless, Baker's point about drugs makes one wonder... What if you could get everyone to cooperate as opposed to compete?