Again, why would the competitors even bother to pay the inventor for the idea? If they know that another company will release the pill, they'll just buy the pill, re-manufacture it and start selling it a week later.
They would buy it because if they didn't they wouldn't have anything to manufacture in the first place.
They would shift their priorities and manufacture something else. Who would pay $100 million to the inventor company just to have a one day head start? If it costs $100 million for the R&D, how would the inventor company make any money back when the selling price for the initial pill is $20?
In this hypothetical situation, let's assume that the company that bought the drug from the inventor is a brand-name company and that the company (another brand name company) that just took the and put it in a machine that automatically recreated it (exactly so that there is no difference between the brands besides the names) and automatically teleported somehow to all store shelves.
Both manufacturers might profit from the drug, but the initial purchaser would profit a bit more by the fact that they got it out faster, making up for the cost of the initial purchase. However, let's even assume that the day the drug is launched another manufacturer can start competing right then and there. In this case the problem of no one wanting to buy a drug to manufacture would hurt the industry because it would simply have nothing to manufacture. In other words if they all waited for the next guy to buy it, then they would all suffer. Therfore, the manufacturers would merely make agreements amongst themselves which would be enforced by private arbiters.
You didn't read my scenario. Company A pays $100 million to the inventor company and gets the pill. Company B just buys the pill and pops it into the machine which creates an exact replica and teleports it into the store shelves. Company A just wasted all of their money for a 1 hour head start.
If all the drug manufacturers were in collusion together, then the inventor company would get little profit. Where's the incentive to even spend $100 million when the drug manufacturers all agree to give a maximum of $1 million and then they split that $1 million amongst themselves and they all start popping it into the machine.
And since you brought up brand name, how would a small company ever survive? They would buy the pill and sell it, then a big brand name company will just take it and remanufacture it.
You are assuming that a small company must survive in every industry. This is just not true. Look at the CPU industry, it only has big companies and no one is complaining. Some industries are only competitive at the big level, such as manufacturing. If you try to manufacture say paperclips in your garage you are not going to be able to sell them profitably compared to a giant manufacturer. This is just the nature of free markets.
I'm not saying that some industries need small companies. However, your model makes small companies completely irrelavant. If a large company can just take your product, pop it into a machine, and recreate it automatically, the small company has no rights for their IP. Large companies can do everything, they would spend almost no money on product development or research. They see something making a profit, they would just take it and pop it into the machine and sell everything under the sun under one brand name. So, basically we end up in a society that completelly stops innovative processes.
You're arguing on an economic standpoint, but I don't see how your viewpoint is furthering scientific innovation more than the current system.