I've seen this argument made regarding American health care costs in general. Everyone else pays much less because we're subsidizing them, the argument goes. Except that American medical R&D spending is about $500/year per capita, while the gap in health care costs is thousands. That's some combination of waste and people getting rich off of other people's suffering.

This product could pretty clearly be sold at a profit at the old price. But they can make more money if they charge more. People will die because they can't afford it anymore? Fuck 'em, apparently.

100% of the surplus accruing to pharmaceutical does not go toward research. Of the X% that does go to research, that marginal increase is likely not as effective as the budgets before the increased margin.

Also, patents shift effort from areas with low patentability prospects to areas with higher patentability prospects, even if the rate of return in terms of public health would have been substantially higher if the former opportunities were maximized first.

For that and many other reasons, the net social gain from pharmaceutical patents is contentious. Many economists have argued that the only justification is improved incentive to cover the cost of our expensive regulatory environment. Patents for almost everything else? Almost certainly a net loss.

There's little evidence that patent monopolies are needed to induce investment, generally. Don't forget that there's almost $100 trillion in liquid, investable assets floating around out there. There's more than enough capital to fund anything with even a tiny predicted profit. But individual capitalists want to maximize their returns, and monopolies often provide better margins. That good patents attract more capital is not evidence of anything; capital will first go to anything that promises higher returns relative to anything else, even if the net effect is reduced overall wealth creation for investors.

Imagine two countries with equivalently sized economies at year 1. The first is run by a dictator who will use the power of the state to extract wealth from the citizens. Part of the process involves giving sweet-heart deals to foreign investors, partly as a way to off-shore the money. For those investors the returns are 20%.

The second country is a stable democracy with low corruption. Politicians only seek foreign investment when it makes fiscal sense, and the terms only provide returns of about 10%.

In the short-term, where do you think all the capital will go to first? Over 30 years, where do you think most of the net global wealth creation will come from?

Ergo, that investors prefer investments backed by patents is proof of nothing.

That the U.S. and developed countries are leaders in research and investment also proves very little. We're also leaders in areas like consumer and industrial design, organizational management, etc, with no or minimal regulatory protection. We could be (and arguably are) leaders in technology despite protections, not because of them.