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I'm going to need to see some hard data on both sides before I'll simply accept that claim.
There are also alternative solutions we could use besides granting the first company a total monopoly. For example, generics could be taxed early on in order to subsidize the approval process for new drugs.
Waston pharmaceuticals, one of the largest generic drugs makers in the US has total sales of $4.6B. Pfizer, one of the biggest drug companies in the world, has an R&D budget of $8.5B.
Even if you doubled the price of all of Waston's drugs through a tax and gave that to Pfizer, you wouldn't even cover half of their R&D expense.
Without a patent system, there would be zero incentive to create new drug. A drug company could spend $100M to get a new drug to market and with the typical 8 years of patent life, charge the exact price (let's say $100/month, with $90 being profit) to recoup their expenses (no long-term profit). It would be a SIMPLISTIC exercise for another company to come in and starting selling the drug for $20/month and make $10 in profit, having the benefit of never coming up with the $100M to get the drug approved.
I agree that there are alternatives to the current patent system, but like democracy, "it may not be perfect, but it's the best system so far".
