Should Prizes Replace Patents? A Critique of the Medical Innovation Prize Act of 2005

Abstract

The Medical Prize Innovation Act of 2005 proposes replacing the current patent regime with a prize system. This paper is the first in the legal literature to evaluate and critique the weaknesses of such the proposed prize system. The prize system described in the Act faces challenges including, decisions of prize spending and values of prize payments, duplication of resources, loss of commercial and marketing development, and significant administrative costs. This paper looks both to historical and modern precedents to argue for a more modest change: a pilot program that distributes prizes in particular market segments to supplement the current patent regime and bridge gaps in NIH funding. The paper also suggests that a program could borrow from the NIH institutional structure, priority setting and review process as a workable starting point and also for comparison. Thus, one can observe the untested empirics of a prize system to better evaluate the impact and desirability for a total replacement of the patent system.

Keywords: prize, reward systems, medical innovation, intellectual property, patents, patent reform, medical research