Read the passage and mark the letter A, B, C or D on your answer sheet to indicate the best answer to each of the following questions from 1...

Read the passage and mark the letter A, B, C or D on your answer sheet to indicate the best answer to each of the following questions from 1 to 10.

        The U.S. Center for Medicare & Medicaid Services’ decision to negotiate prices for ten drugs under the Inflation Adjustment Act triggered a maelstrom of commentary. Most concede negotiation will attenuate costs for patients and taxpayers, yet critics warn that shrinking expected profits could chill future discovery. This familiar skirmish obscures a larger design problem: do patents, as deployed in health care, reliably deliver social value commensurate with their costs? [I] The debate, in other words, is less about one policy lever than about the engine driving innovation itself.

        Evidence abounds that innovators chase rewards, but current incentives are misaligned with public value. Patent protections can skew research trajectories, privileging expedient monopolies over societally valuable therapies. Perversely, firms may pursue “life-cycle management” – secondary patents and tactical tweaks that extend exclusivity while adding meager benefit. Diseases demanding longer trials (e.g., early-stage cancers) get deprioritized as the monopoly window erodes. And the market test favors paying customers and rich countries, biasing pipelines away from global need. [II]

        One alternative, long championed by economist Michael Kremer, is a government patent buyout: purchase the patent at an auction-based estimate of its private value, then dedicate the knowledge to the public domain. France’s 1839 buyout of the daguerreotype catalyzed worldwide diffusion; a similar logic would price most new drugs like generics and extinguish wasteful life-cycle games. Under this system, follow-on applications could accelerate as barriers fall and spillovers compound. [III] Social gains would be greatest where today’s monopoly pricing is steepest.

        Yet buyouts are no panacea. Auctions must be well-designed to curb collusion and mispricing; governments must avoid confiscatory tactics; and financing the purchases poses nontrivial fiscal choices. In some areas, notably antibiotics, extra “pull” subsidies may still be required to ensure adequate innovation even after a buyout. Political obstacles are formidable – Congressional reform is arduous – yet precedent counsels patience: Medicare’s drug coverage and price talks each took decades. With negotiations now underway, a window for deeper reform may be opening. [IV]

(Adapted from STAT News: “Patent buyouts could spur vital innovation in antibiotics, vaccines, and other medical fields,” 14 Nov 2023)

Question 1. The word perversely in paragraph 2 mostly means ______.

A. counterintuitively harmful                                B. marginally helpful

C. largely indifferent                                        D. purely tactical

Question 2. What does the passage imply about the patent “market test”?

A. It eliminates inequity by prioritizing underfunded global diseases everywhere.

B. It mainly rewards longer, riskier trials regardless of profitability signals.

C. It biases innovation toward affluent patients and countries that can sustain high prices.

D. It consistently lowers prices while intensifying competition among generics.

Question 3. Which of the following best summarises paragraph 3?

A. Buyouts chiefly punish firms, ensuring patents expire sooner without replacement.

B. Auction-priced buyouts place inventions in the public domain, yielding generic-like prices, curbing life-cycle games, and potentially accelerating follow-on innovation.

C. Government ownership mandates permanent price caps that suppress new research across sectors.
D. International treaties already require buyouts for high-priced medicines in rich markets.

Question 4. What historical example supports buyouts?

A. Salk polio vaccine royalties                        B. TRIPS patent flexibilities

C. Bayh-Dole march-in rights                        D. Daguerreotype purchase, 1839

Question 5. According to paragraph 4, in some cases like antibiotics, innovation may still need ______.
A. broader patent terms replacing auctions for difficult-to-test compounds entirely

B. clinical-trial tax credits offsetting every phase across multinational sponsors

C. additional targeted subsidies beyond auction-set buyout prices and generic-level revenues

D. exclusive distribution contracts guaranteeing hospital uptake for a fixed duration

Question 6. Where in the passage does the following sentence best fit?

By delinking reward from monopoly tenure, buyouts could widen access while preserving pre-market incentives.

A. [I]                        B. [II]                                C. [III]                        D. [IV]

Question 7. The phrase this system in paragraph 3 refers to ______.

A. life-cycle management                                B. patent buyouts

C. price negotiation                                        D. monopoly pricing

Question 8. Which of the following can be inferred from the passage?

A. Negotiations will inevitably eradicate all pharmaceutical monopolies within a decade.

B. Buyouts remove any need for subsidies across every infectious-disease domain.

C. Political resistance is minor because Congress has repeatedly streamlined patent reform.

D. Durable buyout programs would require careful governance, credible pricing methods, and sustained fiscal commitments beyond a single budget cycle.

Question 9. Which of the following best paraphrases the underlined sentence in paragraph 2?

Patent protections can skew research trajectories, privileging expedient monopolies over societally valuable therapies.

A. Patent rules steer R&D toward projects maximizing exclusivity payoffs rather than those delivering greatest social benefit, thereby distorting scientific priorities.

B. Firms naturally prefer difficult, lengthy trials because they extend exclusivity windows and improve therapeutic quality across indications and populations.

C. Market forces always elevate most socially valuable cures since monopolies attract wider investment from every payer segment worldwide.

D. Secondary patents generally convert marginal tweaks into major breakthroughs, ensuring societal value rises in proportion to exclusivity length.

Question 10. Which of the following best summarises the passage?

A. Drug negotiations will permanently settle debates over innovation and affordability worldwide.

B. Patents often misalign incentives; auction-based buyouts could realign rewards with social value, though implementation and political hurdles remain significant.

C. Extending patent terms is the only viable path to spur antibiotic pipelines.

D. Generic pricing alone suffices to guarantee continuous biopharmaceutical innovation globally.