Agreed. Bring in that sort of incentive-based deregulation and suddenly every new drug would be made and manufactured by an entirely new company (which just happens to be 100% owned by an existing big pharma company).
Incentives aren't the solution to everything, sometimes regulation works better. For instance, you're liable for all the damage you cause while on the road, and yet we still need road rules to stop people from behaving like dicks (and even then, it barely works).
If a smaller company is 100% owned by a larger company then people suing the smaller company would have access to the large company's assets (there is some sort of equity cut-off here, in banking I believe it's as low as 9.9%). Corporate law thought of this.
OK, so you set up a wholly independent company owned by a few employees. This company licenses the patent for NewDrug from BigCompany.
Heck, you don't even have to do it with shelf companies. Hi there, I'm BigCompany, and I'm willing to license this drug which I think might work to any startup that feels like selling it! Or if that would expose me to liabiilty, I'm willing to license this substance which I developed which may or may not be useful as a drug. That would still be a win-win situation.
It sounds crazy when you put it like that, but people really will swallow a random pill given to them by a man they've never met in the toilets of a dodgy club in Brixton...
Incentives aren't the solution to everything, sometimes regulation works better. For instance, you're liable for all the damage you cause while on the road, and yet we still need road rules to stop people from behaving like dicks (and even then, it barely works).