The current reliance on patent monopolies is due to the fact that the system is a surviving legacy of the feudal guild system, it is not the result of economic analysis demonstrating its superiority. The recent questioning of this system is long overdue. With prescription drugs accounting for a large and rapidly growing share of GDP, inefficiencies in their production will impose an ever higher cost through time. (The Center for Medicare and Medicaid Services [CMS] projects that prescription drug spending will be equal to 2.8 percent of GDP by 2013). This paper lays out some of the key issues in assessing the relative merits of different systems. Some of these issues can be reasonably well quantified, such as the excess cost to consumers that results from patent monopolies in prescription drugs. The answers to other questions, such as the impact of alternative incentive mechanisms on innovation, may necessarily be more speculative, but it can still be helpful to draw out more clearly what is at issue.