Currently, drug research is recouped through sales to consumers of the drug. Often, drugs researched and approved today are targeting extremely dire ailments, or are alternatives to those with allergies to common popular remedies.

It is important to not just consider the position of a pharmaceutical research corporations impact on the economy but the broader picture. Their research is often subsidized by the dying and suffering, or in the era of the PPACA it might be subsidized in part by a corporation that has to spread out that burden broadly to all healthcare subscribers.

The poor are sicker, on average, than the rich. Their reduced access to medicine makes their complications work, and the environments they are forced into often cause their more illness.

The drug R&D system we have now disproportionately extracts its funding from everyone above medicaid (and even on medicaid you can only get partial drug coverage) and anyone below a reasonable standard of living.

There are multiple ways to intervene into this system to produce as much research as we have now with an alternative funding model.

Since the majority of the consumers of these drugs are on national healthcare programs (usually medicare or medicaid - old or poor) we could simply transition to expansive national funding programs for private research, or public drug R&D. The revenue barely shifts hands then, but the problem becomes that the state is an awful judge of value and as demonstrated by NASA or the DoD is a terrible judge of what deserves funding or how much to give.

This system isn't even theoretical, Bernie and Obama have already proposed such laws: https://en.wikipedia.org/wiki/Prizes_as_an_alternative_to_pa...

The other consequence is that since IP and patents are pure fiction in reality and must be constructed as a state institution to enforce, countries like China and India can just ignore US patents on drugs, instead manufacturing and distributing the fruits of American and European labor (since we end up paying the overpriced patent prices) abroad for no cost.

Is it worth aggressively pursuing research when the least able to afford it often ends up having to pay for it? How do we know that competitive drug research would not be done through institutional and charitable funding, like how a ton of other research works? Even in the absence of patents, there are upstart costs to building and manufacturing drugs. And within the drug industry, people often ignore that the most central reason why pharma R&D needs to spend so much ludicrous money is because of the FDA regulations involving getting their drugs approved. If drugs were more deregulated - less of a problem in the information age, when research can easily be distributed and problems broadcast internationally within minutes of discovery - we could dramatically cut the costs of research such that traditional manufacturing models, that have worked for years, could work the same for making pills.

Personally, I think a combination of substantive deregulation (you could still have FDA approval, and even a law where doctors need to notify consumers when they are prescribing experimental drugs and the risks involved, but they would not be mandatory to start selling and profiting), research prizes, public funding, private charity (a lot of cancer research is charitable, and almost any ailment of great duress also gets incredible amounts of charitable research funding) and the recognition that using a guaranteed monopoly only enforced in the western world disproportionately hurts the sick, and thus hurts the elderly and poor who either have to pay partials under state coverage or have to pay entirely out of pocket.