Scrooge and intellectual property rights.

A medical prize fund could improve the financing of drug innovations A t Christmas, we traditionally retell Dickens's story of Scrooge, who cared more for money than for his fellow human beings. What would we think of a Scrooge who could cure diseases that blighted thousands of people's lives but did not do so? Clearly, we would be horrified. But this has increasingly been happening in the name of economics, under the innocent sounding guise of " intellectual property rights. " Intellectual property differs from other property— restricting its use is inefficient as it costs nothing for another person to use it. Thomas Jefferson, America's third president, put it more poetically than modern economists (who refer to " zero marginal costs " and " non-rivalrous consumption ") when he said that knowledge is like a candle, when one candle lights another it does not diminish from the light of the first. Using knowledge to help someone does not prevent that knowledge from helping others. Intellectual property rights, however, enable one person or company to have exclusive control of the use of a particular piece of knowledge, thereby creating monopoly power. Monopolies distort the economy. Restricting the use of medical knowledge not only affects economic efficiency , but also life itself. We tolerate such restrictions in the belief that they might spur innovation, balancing costs against benefits. But the costs of restrictions can outweigh the benefits. It is hard to see how the patent issued by the US government for the healing properties of turmeric, which had been known for hundreds of years, stimulated research. Had the patent been enforced in India, poor people who wanted to use this compound would have had to pay royalties to the United States. In 1995 the Uruguay round trade negotiations concluded in the establishment of the World Trade Organization, which imposed US style intellectual property rights around the world. These rights were intended to reduce access to generic medicines and they succeeded. As generic medicines cost a fraction of their brand name counterparts, billions could no longer afford the drugs they needed. For example, a year's treatment with a generic cocktail of AIDS drugs might cost $130 (£65; €170) compared with $10 000 for the brand name version. 1 Billions of people living on $2-3 a day cannot afford $10 000, though they might be able to scrape together enough for the generic drugs. …