Financing Pharmaceutical Innovation: How Much Should Poor Countries Contribute?
AbstractWe use a public economics framework to consider how pharmaceuticals should be priced when at least some of the R&D incentive comes from sales revenues. We employ familiar techniques of public finance to relax some of the restrictions implied in the standard use of Ramsey pricing. In the more general model, poor countries should not necessarily cover even their own marginal costs, and the pricing structure is not related to that which would be chosen by a monopolist in a simple way. We use this framework to examine on-going debates regarding the international patent system as embodied in the WTO’s TRIPS agreement.
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Bibliographic InfoPaper provided by Center for Global Development in its series Working Papers with number 28.
Length: 27 pages
Date of creation: Jul 2003
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Web page: http://www.cgdev.org
pharmaceutical; poor countries; pricing structure; patent system;
Other versions of this item:
- William Jack & Jean O. Lanjouw, 2005. "Financing Pharmaceutical Innovation: How Much Should Poor Countries Contribute?," World Bank Economic Review, World Bank Group, vol. 19(1), pages 45-67.
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- I12 - Health, Education, and Welfare - - Health - - - Health Production
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-03 (All new papers)
- NEP-HEA-2006-09-03 (Health Economics)
- NEP-INO-2006-09-03 (Innovation)
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- Patricia M. Danzon & Eric L. Keuffel, 2013. "Regulation of the Pharmaceutical-Biotechnology Industry," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned? National Bureau of Economic Research, Inc.
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Kiel Working Papers
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- Julia Fimpel & Michael Stolpe, 2006. "The Welfare Costs of HIV/AIDS in Eastern Europe: An Empirical Assessment Using the Economic Value-of-Life Approach," Kiel Working Papers 1297, Kiel Institute for the World Economy.
- Pedro Pita Barros & Xavier Martinez-Giralt, 2006. "On insurance and the cost-sharing of pharmaceutical R&D," Working Papers 293, Barcelona Graduate School of Economics.
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- Pedro Barros & Xavier Martinez-Giralt, 2008. "On international cost-sharing of pharmaceutical R&D," International Journal of Health Care Finance and Economics, Springer, vol. 8(4), pages 301-312, December.
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