Doesn't that fall apart when the for profit partner needs to pay the other $990 million dollars and then still cannot patent the drug?

I don't know. It's certainly a risk, but there's only one way to find out. I think there are companies willing to do it (cipla is one that I'm thinking about approaching).

I'd like to see more of a potential plan here - otherwise I'm afraid that making a drug un-patentable would make it /less/ likely that it goes to market.

I believe I've seen evidence of exactly that happening as margins for a drug are very low if it can't be protected (via IP), and the cost to bring a drug to market is so high.

I see many problems with current IP system - but I don't see how this is avoidable in a completely commoditizable generic drug market.

If I'm making some incorrect assumptions here, I'd love to know!

> I'm afraid that making a drug un-patentable would make it /less/ likely that it goes to market

This is definitely a possible outcome.

http://biz.yahoo.com/p/5qpmu.html

generics manufacturers make ~ 6% margin, which is basically "what most businesses make". "Drug manufacturers - Major" make 20% margin. Keep in mind also that big pharma spends about as much on advertising as they do on R&D.