Uncertainty applies just as much to the IP rights regime.
Ganjour and Chernyak 11 – Afschin Gandjour is a medical doctor, health economist, and Gandjour received an M.D. from Hannover Medical School in Germany, an M.B.A. from Duke University, a Ph.D. in health economics from the University of Cologne in Germany, and an M.A. in philosophy from the University of Düsseldorf in Germany. He held faculty positions at the University of Cologne Medical School, Baylor College of Medicine, and Louisiana State University Pennington. Nadja Chernyak, Department of Public Health, Center of Health and Society, Heinrich-Heine University Düsseldorf, Düsseldorf, Germany.
Afschin Gandjour and Nadja Chernyak, October 2011, “A new prize system for drug innovation,” Health Policy, https://www.sciencedirect.com/science/article/pii/S0168851011001114?via%3Dihub#!
To provide sufficient incentives for innovation the terms of any award must be fixed before the informational asymmetry with regard to costs and benefits of research is resolved . The threshold value λ, which is used for monetary valuation of health benefits under VBP, may offer credible and time consistent incentives for medical innovation, particularly if based on the cost of palliative or nursing care. Of course, future WTP for health improvements may change due to government budgetary pressures. However, under current patent system there is also a risk of future modifications of patent law as well as enforcement of discounts by the government.