Funding the first copy

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If we want to enable free access to knowledge goods, we need to find ways to finance the first copy. The industrial business model has been to regard the costs of the first copy as up-front investment that is later recouped by controlling access to subsequent copies. This model is clearly broken, if everyone can make copies, or if the resulting price of the copies is so high, that people who need them, cannot afford it. As is the case with many drugs, particularly, but not only, in the developing world. In the case of the latter, the big idea is to move away from the patent system (which grants exclusivity as an incentive to invest in research) to a system of prices. As James Love and Tim Hubbard write in an extensive research paper:

Reforming the way we pay for R&D on new medicines involves a simple but powerful idea. Rather than give drug developers the exclusive rights to sell products, the government would award innovators money: large monetary “prizes” tied to the actual impact of the invention on improvements in health care outcomes that successful products actually deliver.

Source: James Love and Tim Hubbard. "The Big Idea: Prizes to Stimulate R&D for New Medicines." Chicago-Kent Law Review, Volume 82, Number 3 (2007)