Would a Cancer Vaccine Pay?
One of my favorite web sites, Edge.org, recently posed a question to famous thinkers: What is Your Most Dangerous Idea?. There are many interesting ideas on a variety of topics.
Paul Ewald said that it may be possible to find a vaccine against a major disease, such as cancer.
The goals of the interventions do not mesh nicely with the profit motive of the free market. Vaccines, for example, are not very profitable.
Pharmas cannot make as much money by selling one vaccine per person to prevent a disease as they can selling a patented drug like Vioxx which will be administered day after day, year after year to treat symptoms of an illness that is never cured.
Non-economists frequently make arguments of this sort. One hears that the auto companies really know how to build cars that will deliver 100 miles per gallon, but they are holding them back. The classic myth is that General Electric knows how to build a light bulb that will never burn out, but they want to keep selling light bulbs, so they are keeping the secret hidden.
Economic theory would suggest that it is highly unlikely that firms would hold back miraculous inventions. A monopolist could find a way to profit from the invention by selling it at a high price. In a competitive market, a firm would develop the invention to avoid being beaten out by other firms.
I had lunch with Tim Harford last week, and he pointed out that the problem with vaccines is that they are so valuable that governments cannot resist taking them. It is safer to develop something like Viagra, whose patent the government is unlikely to violate, than a cure for AIDS, because the latter is likely to be appropriated by government.