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Universities and access to medicines: What is the optimal ‘humanitarian license’?

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  • Annamaria Conti

    ()
    (Chaire en Economie et Management de l'Innovation, Collège du Management de la Technologie, Ecole Polytechnique Fédérale de Lausanne)

  • Patrick Gaulé

    ()
    (Chaire en Economie et Management de l'Innovation, Collège du Management de la Technologie, Ecole Polytechnique Fédérale de Lausanne)

Abstract

This paper seeks to add an economic contribution to the current debate on using university licensing contracts to improve access to medicines in developing countries. We build a simple model in which we have a university licensing out an academic invention to a profit-maximizing pharmaceutical company. We compare three different types of licensing contracts that the university might use to enhance access to pharmaceuticals in the South: (1) an exclusive license limited to the North; (2) an exclusive license worldwide with a price cap in the South; and (3) an exclusive license worldwide with a price cap in the South and a clause specifying that the licensee would lose its exclusivity in the South if it does not supply the Southern market. We show that in a simple model with asymmetric information on production costs the latter type of contract dominates the two others.

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Bibliographic Info

Paper provided by Ecole Polytechnique Fédérale de Lausanne, Collège du Management de la Technologie, Management of Technology and Entrepreneurship Institute, Chaire en Economie et Management de l'Innovation in its series CEMI Working Papers with number cemi-workingpaper-2008-005.

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Length: 25 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:cmi:wpaper:cemi-workingpaper-2008-005

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Keywords: technology licensing; university licensing; access to medicines;

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