Read the passage and mark the letter A, B, C or D on your answer sheet to indicate the best answer to each of the following questions from 1 to 10.
The U.S. Center for Medicare & Medicaid Services’ decision to negotiate prices for ten drugs under the Inflation Adjustment Act triggered a maelstrom of commentary. Most concede negotiation will attenuate costs for patients and taxpayers, yet critics warn that shrinking expected profits could chill future discovery. This familiar skirmish obscures a larger design problem: do patents, as deployed in health care, reliably deliver social value commensurate with their costs? [I] The debate, in other words, is less about one policy lever than about the engine driving innovation itself.
Evidence abounds that innovators chase rewards, but current incentives are misaligned with public value. Patent protections can skew research trajectories, privileging expedient monopolies over societally valuable therapies. Perversely, firms may pursue “life-cycle management” – secondary patents and tactical tweaks that extend exclusivity while adding meager benefit. Diseases demanding longer trials (e.g., early-stage cancers) get deprioritized as the monopoly window erodes. And the market test favors paying customers and rich countries, biasing pipelines away from global need. [II]
One alternative, long championed by economist Michael Kremer, is a government patent buyout: purchase the patent at an auction-based estimate of its private value, then dedicate the knowledge to the public domain. France’s 1839 buyout of the daguerreotype catalyzed worldwide diffusion; a similar logic would price most new drugs like generics and extinguish wasteful life-cycle games. Under this system, follow-on applications could accelerate as barriers fall and spillovers compound. [III] Social gains would be greatest where today’s monopoly pricing is steepest.
Yet buyouts are no panacea. Auctions must be well-designed to curb collusion and mispricing; governments must avoid confiscatory tactics; and financing the purchases poses nontrivial fiscal choices. In some areas, notably antibiotics, extra “pull” subsidies may still be required to ensure adequate innovation even after a buyout. Political obstacles are formidable – Congressional reform is arduous – yet precedent counsels patience: Medicare’s drug coverage and price talks each took decades. With negotiations now underway, a window for deeper reform may be opening. [IV]
(Adapted from STAT News: “Patent buyouts could spur vital innovation in antibiotics, vaccines, and other medical fields,” 14 Nov 2023)
Question 1. The word perversely in paragraph 2 mostly means ______.
A. counterintuitively harmful B. marginally helpful
C. largely indifferent D. purely tactical
