12 April 2005, erasmuse@indiana.edu, G406, chapter 24 patents
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1. Fishermen: fishermen deliberately accept risk in exchange for higher profits.
2. Eli Lilly and Failure: Lilly expects failure, but hopes for big profits from patents in the rare cases when its scientists are successful.
3. How to Regulate Drug Innovation:
(a) Patents
(b) Prizes--- lump sum or per pill sold
(c) Price floors
(d) Subsidies to research-- direct, or via tax breaks
(e) Government production (NIH labs)
(f) Research grants to universities and nonprofits.