Learned about this little story in my Masters' Business Strategy class
http://strategypeak.com/softsoaps-unconventional-strategy/Somewhat relevant to your discussion on IP and being able to make money and compete when the option of IP is not available.
In the current economy of easy file downloading, the way companies continue to make money is by providing services that data alone can't give. Collecting, organizing, and storing music and movies, making suggestions based on your history, and customizing your experience to fit you. That's the only way iTunes and Netflix can exist. In your drug example, you could either maintain profits by claiming expertise of the drugs that others can't, since you developed it, or sell it along with a service of being able to monitor the patient's doses and health to make sure there are no complications that someone who just buys and takes it at home can run into, or even better, customize each drug mix and dosage specifically for every customer's biology and body type, which you can do thanks to the trials and research information you collected. These are things that are near impossible to replicate.
Regarding monopolies, they are concerns that are obvious to anyone with a bit of schooling in economics, but are of no concern to anyone with a lot of schooling in economics. Two reasons:
1) Monopolies grow big, big companies get set in their routine, and after a while can't change and adapt as quickly to new markets and technologies. They always lose out to newer, smaller, more agile competitors. Kodak is an excellent example of monopoly failure.
2) I have mentioned this over and over, and maybe you weren't around when I did, but there are TWO types of threats to any product. One is the type that anyone with a bit of econ schooling always brings up, which is directly competing product (e.g. Coca Cola vs Pepsi). Most people think the only way to take down a monopoly is to come up with a product that does the same thing, basically. What they forget about is the second threat to products, which is
SUBSTITUTION (e.g. forget Colas, and drink juice, milk, or even just water).
If you keep the
substitution threat in mind, you'll realize that all monopolies are temporary, no matter how entrenched they are, because if the monopoly becomes too cumbersome, people will always figure out how to just buy or do something else. Even if it involves switching to taking shitty 640x480 photos that get saved to floppy disks.
Disclosure: I own three patents and hope to make money off them, though they are mostly protected by the obscurity of the technology than the actual IP rights.
