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Patents, Price Controls, and Access to New Drugs: How Policy Affects Global Market Entry

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  • Jean O. Lanjouw
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    Abstract

    Efforts to strengthen the global patent system for pharmaceuticals continue to be controversial, and what will likely be a similarly fraught international debate over price controls has begun. The outcome of international negotiations and the resulting policy decisions made by each country will have many ramifications %u2013 influencing the size of future investment in medical research, the availability of the resulting therapies, how the financial burdens are distributed across countries, and finally the health of consumers. This paper considers how legal and regulatory policies affect whether new drugs are marketed in a country, and how quickly. Less than one-half of the new pharmaceutical molecules that are marketed worldwide are sold in any given country, and those that are sold are often available to consumers in one country only six or seven years after those in another. Both price regulation and intellectual property rights influence these outcomes. The analysis covers a large sample of 68 countries at all income levels and includes all drug launches over the period 1982-2002. It uses newly compiled information on legal and regulatory policy, and is the first systematic analysis of the determinants of drug launch in poor countries.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11321.

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    Date of creation: May 2005
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    Handle: RePEc:nbr:nberwo:11321

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    1. Z. John Lu & William S. Comanor, 1998. "Strategic Pricing Of New Pharmaceuticals," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 108-118, February.
    2. Stéphane Jacobzone, 2000. "Pharmaceutical Policies in OECD Countries: Reconciling Social and Industrial Goals," OECD Labour Market and Social Policy Occasional Papers 40, OECD Publishing.
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    Cited by:
    1. Nicolas Houy & Izabela Jelovac, 2013. "Drug launch timing and international reference pricing," Working Papers halshs-00782179, HAL.
    2. Roy, Santanu & Saggi, Kamal, 2011. "Equilibrium parallel import policies and international market structure," Policy Research Working Paper Series 5802, The World Bank.
    3. Ghauri, Pervez N. & Rao, P.M., 2009. "Intellectual property, pharmaceutical MNEs and the developing world," Journal of World Business, Elsevier, vol. 44(2), pages 206-215, April.
    4. 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?, pages 407-484 National Bureau of Economic Research, Inc.
    5. Patricia M. Danzon & Andrew J. Epstein, 2008. "Effects of Regulation on Drug Launch and Pricing in Interdependent Markets," NBER Working Papers 14041, National Bureau of Economic Research, Inc.
    6. Lee G. Branstetter & Chirantan Chatterjee & Matthew Higgins, 2011. "Regulation and Welfare: Evidence from Paragraph IV Generic Entry in the Pharmaceutical Industry," NBER Working Papers 17188, National Bureau of Economic Research, Inc.
    7. Livio Garattini & Simone Ghislandi, 2007. "Should we really worry about “launch delays” of new drugs in OECD countries?," The European Journal of Health Economics, Springer, vol. 8(1), pages 1-3, March.
    8. Emilio Archila & Gabriel Carrasquilla & Marcela Meléndez & Juan Pablo Uribe, 2006. "Estudio sobre la propiedad intelectual en el sector farmacéutico colombiano," INFORMES DE INVESTIGACIÓN 002622, FEDESARROLLO.
    9. Anke Richter, 2008. "Assessing the Impact of Global Price Interdependencies," PharmacoEconomics, Springer, vol. 26(8), pages 649-659, August.
    10. Nebibe Varol & Joan Costa-i-Font & Alistair McGuire, 2011. "Explaining Early Adoption on New Medicines: Regulation, Innovation and Scale," CESifo Working Paper Series 3459, CESifo Group Munich.
    11. Padmashree Gehl Sampath, 2010. "Economic Aspects of Access to Medicines after 2005: Product Patent Protection and Emerging Firm Strategies in the Indian Pharmaceutical Industry," Working Papers id:3336, eSocialSciences.
    12. Nicolas Houy & Izabela Jelovac, 2013. "Drug launch timing and international reference pricing," Working Papers 1301, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.

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