Your example is both inaccurate in critical details:
- you require me to coerce Joe into coming to touch me
- I only require Joe not prevent me from using my own pharma lab and my own materials to cook up my own batch of S
...which is why I won't even answer your question; it's irrelevant to the situation at hand (changing essential details to get the outcome you want is silly).
You're also treating Joe like he's stupid, which is not very likely if he's inventing substance S (you and I may be idiots; Joe is smart with a capital S); given that Joe's a smart cookie it's a safe assumption that Joe is well aware that he's deciding to spend 10 years developing a new technique that can be easily replicated as soon as he invents it.
He's aware of the possibility for (ii) the entire time we're negotiating (i); failing to arrive at a mutually-agreeable arrangement as per (i) (eg something close to cost-of-manufacture; it's not like I can beat that price myself, right?) is a calculated risk on his part, which doesn't always work out in his favor.
There're obvious consequences for (ii) -- among which is Joe no longer deciding to invent substance T -- but those are consequences one can opt for, in precisely the same way that Joe's inflexibility (unwilling to compromise far enough on (i)) has unwanted consequences for Joe (prompting me to pick option (ii)) that he has opted for.
Which in general is the flipside of the "patent-ignoring nations undercut incentive to innovate, making future drugs unlikely to be invented" argument: pharma companies have been extremely well aware in general of eg the situation in india and more generally the sentiment that if push comes to shove (poverty, epidemic, etc.) the right thing to do is ignore patent and manufacture; in the same way that the consequences of ignoring patents are obvious so too is it obvious that driving too hard a bargain for too long will undermine the ability to drive future bargains at all, b/c sooner or later circumstances change and your not-really customers say "fuck it".
EG: it would've been prudent in the long-term for pharmacompanies to push for a standardized international regime for temporary patent abatement (due to epidemic or poverty, etc.) that (presumbably) would have some sliding scale (dire emergencies and abject poverty == SELL AT COST, less so @ the less extreme) and (for example) some notion of compensatory patent extension (eg an extension for 2 years + 2x the duration of the abatement period); such an arrangement wouldn't be ideal, but by proactively crafting a better-than-today, even-if-not-really-good-enough compromise they could've nipped the larger issue (countries going "rogue") mostly in the bud.