Intellectual Property

 Yglesias:

I think the right way to think about striking this balance is in terms of the capital-intensity of what you’re talking about. If you’re talking about a very capital-intensive field, then you won’t have any new products unless there are large financial incentives to innovate. But if you’re talking about a field with low needs for capital inputs, then creating the large incentives is less important and strong IP rights are mostly acting as an obstacle to innovation. The rise of digital technology has made it much cheaper than it was before to produce and distribute most kinds of media. The correct policy response is to adopt somewhat weaker intellectual property rights. Instead, we’ve moved in the opposite direction to shore up firms threatened by potentially disruptive technological change. It’s a mistake.

 I don't think "capital-intensity" is the right term.  It is large size of investment that requires large financial incentives.  In most areas the cost of innovation has declined, but I'm not sure it has declined in drugs.  The cost of drug discovery may be down, but the cost of drug development and testing has suffered from Baumol's cost disease as well it should.  50 years ago, Americans were less concerned about the potential harms from drugs than we are today.  Heck, the Tuskegee syphilis experiment only ended in 1972 which shows how little regard the medical establishment had for the safety of human experimental subjects at that time.  That led to major medical experimentation regulation.