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Patents, Innovation and Access to New Pharmaceuticals

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  • Grabowski, Henry

Abstract

This paper considers the role of intellectual property rights in the development of and access to new pharmaceuticals. A number of studies have found patents are significantly more important to pharmaceutical firms in appropriating the benefits from innovation compared to other high tech industries. The reason for this is because the costs of drug innovation are very high while the costs of imitation are relatively low. Hence the industry is subject to significant free rider problems. The paper discusses the economics of the innovative process and considers how patent policies have evolved in response to these characteristics in several developed countries with research intensive drug firms. One area currently receiving policy attention is the effect of patents on the development of and access to new medicines in developing countries. The final section of the paper focuses on this issue and discusses the need for an orphan drug type program to stimulate more R&D on diseases specific to third world countries.

Suggested Citation

  • Grabowski, Henry, 2002. "Patents, Innovation and Access to New Pharmaceuticals," Working Papers 02-28, Duke University, Department of Economics.
    • Handle: RePEc:duk:dukeec:02-28
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    Cited by:

    1. Maggie Hao & Dana A. Forgione & Liang Guo & Hongxian Zhang, 2017. "Improvement in clinical trial disclosures and analysts’ forecast accuracy: evidence from the pharmaceutical industry," Review of Quantitative Finance and Accounting, Springer, vol. 49(3), pages 785-810, October.
    2. Angelo Kenneth S. Romasanta & Peter Sijde & Jacqueline Muijlwijk-Koezen, 2020. "Innovation in pharmaceutical R&D: mapping the research landscape," Scientometrics, Springer;Akadémiai Kiadó, vol. 125(3), pages 1801-1832, December.
    3. Margaret K. Kyle & Anita M. McGahan, 2012. "Investments in Pharmaceuticals Before and After TRIPS," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1157-1172, November.
    4. Marco Ceccagnoli & Matthew J. Higgins & Vincenzo Palermo, 2014. "Behind the Scenes: Sources of Complementarity in R&D," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(1), pages 125-148, March.
    5. Peter Willemé & Michel Dumont, 2016. "Machines that go ‘ping’: Medical Technology and Health Expenditures in OECD Countries," Health Economics, John Wiley & Sons, Ltd., vol. 25(3), pages 387-388, March.
    6. Lorenz, Steffi, 2015. "Diversität und Verbundenheit der unternehmerischen Wissensbasis: Ein neuartiger Messansatz mit Indikatoren aus Innovationsprojekten," Discussion Papers on Strategy and Innovation 15-01, Philipps-University Marburg, Department of Technology and Innovation Management (TIM).
    7. Volman, Lucas, 2018. "The TRIPS Article 31 Tug of War Developing Country Compulsory Licensing of Pharmaceutical Patents and Developed Country Retaliation," LawArXiv 6cxaj, Center for Open Science.
    8. Sorisio, Enrico & Strøm, Steinar, 2006. "Innovation and market dynamics in the EPO market," Memorandum 12/2006, Oslo University, Department of Economics.
    9. Luiz Andrade & Catherine Sermet & Sylvain Pichetti, 2016. "Entry time effects and follow-on drug competition," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 45-60, January.
    10. Langinier, Corinne, 2004. "Are patents strategic barriers to entry?," Journal of Economics and Business, Elsevier, vol. 56(5), pages 349-361.
    11. Andreas Eckert & Wolfgang Maennig, 2021. "Pharmainnovationen: überragende Position der USA und Schwächen der deutschen Forschung [Pharmaceutical Innovations: Superior Position of the USA and Weaknesses of German Research]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(8), pages 652-659, August.
    12. Ants Kukrus & Raul Kartus, 2005. "Patent Protection of Pharmaceutical Products in the Globalising World Economy," Working Papers 136, Tallinn School of Economics and Business Administration, Tallinn University of Technology.
    13. Neel U. Sukhatme & Judd N. L. Cramer, 2013. "Optimal Patent Term and Cross-Industry Measures of Patent Term Sensitivity," Working Papers 1484, Princeton University, Department of Economics, Industrial Relations Section..
    14. Michel Dumont & Peter Willemé, 2013. "Working Paper 02-13 - Machines that go ‘ping’: medical technology and health expenditures in OECD countries," Working Papers 1302, Federal Planning Bureau, Belgium.
    15. Khanna, Rajat, 2023. "Passing the torch of knowledge: Star death, collaborative ties, and knowledge creation," Research Policy, Elsevier, vol. 52(1).
    16. Bonnin Roca, Jaime & O'Sullivan, Eoin, 2022. "The role of regulators in mitigating uncertainty within the Valley of Death," Technovation, Elsevier, vol. 109(C).

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