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The potential for price hiking and deterring R&D in our current patent system has led some economists and legislators to advocate for a prize system (see [[Medical Innovation Prize Fund Act]]) instead of a patent system for pharmaceutical drugs.<ref name= "Radical" /> Legislators have proposed bills that provide for prize systems for a small class of drugs (see [[Prize Fund for HIV/AIDS Act]]). Under this system, companies that invent a new drug will receive a lump sum prizefrom a pool of up to $3 billion per year and no right to exclude would be awarded to the company. The rights to money for the drug will then prize pool would be placed in provided by the public domain, creating generic drugsfederal government and insurance companies. The biggest benefit A panel of a prize system is experts would determine which drug performs the ability best allowing research to target research be targeted towards a specific problem. With prize money as <ref name = "Radical" /> Proponents of the incentive, research companies are more likely to devote time and resources towards the identified issue. In addition, HIV/AIDs Act including Bernie Sanders suggest that the prize system lowers may lower barriers to entry; and allow nontraditional parties are encouraged to participatein finding a needed solution.

Although the prize system idea sounds promising for individuals requiring medication without high reservation price, the issue of sustained government funding for such endeavors hurts this proposal. Private investors, such as the Bill and Melinda Gates Foundation, offer similar prize systems for pharmaceuticals discoveries. However, if private investment has proven to be effective, why does the government need to intervene? Legislators Proposed Prize Systems have proposed bills that provide for prize systems for a small class of drugs (see [[Prize Fund for HIV/AIDS Act]]). Prize systems could take taken many different formsincluding:# Opt-in systems where the government pays at least the monopoly profits that the patent holder would expect to receive.# System where patents are exchanged for compensation through an auction.# Offer cash subsidy to consumers who value the patented product more than the marginal cost but cannot afford the patented product at a monopoly price.

No one knows the economic effects of prize systems; there There is lack of empirical evidence supporting the benefits of a prize system over a patent system. There are , but several factors that need to may be considered in creating if a prize system is to be implemented need to be [http://www.bu.edu/law/journals-archive/scitech/volume131/documents/wei_web.pdf (BU)]:

What is the criteria for awarding a prize and how much prize money is each innovative drug worth? This is one of the biggest problems in establishing a prize system. Prize payments that are too low won’t provide enough incentive, while payments that are too high may incur resource duplication costs. The prize payment amount also has to be individually tailored to the benefit of the drug. People suggest the value of the payment be dependent on the ‘social value’ of a drug, but how is that social value determined? Will a distinction be made between medically necessary drug inventions and lifestyle improvement drugs (e.g. acne medication)?Additionally, private investors such as Bill and Melinda Gates are able to supply similar prize systems for pharmaceuticals discoveries, but the government may struggle to find adequate resources for funding.

The MIPF creates a board of trustees that has the responsibility of awarding prize payments. Though the board of 13 members is designed to be unbiased, it is unlikely that they will not be subject to political and external pressures, leading to a distorted allocation of resources.  A negative aspect of the patent system is the controversy and dispute that follows patent distribution of benefits. We can expect that there will also be challengers regarding the recipient of prize payments, thus the prize system has to specify how to resolve disputes, and also develop a thorough An appropriate screening mechanism to confirm the reported benefits of the invented drughas not been designed either and may be needed to preserve the safety of the consumer. <section begin=Patent_Reform /> <section begin=Patent_Reform />