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Special Interest Politics and Intellectual Property Rights: An Economic Analysis of Strengthening Patent Protection in the Pharmaceutical Industry

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Author Info
Chu, Angus C.

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Abstract

Since the 80’s, the pharmaceutical industry has benefited substantially from a series of policy changes that have strengthened the patent protection for brand-name drugs as a result of the industry’s political influence. This paper incorporates special interest politics into a quality-ladder model to analyze the policymakers’ tradeoff between the socially optimal patent length and campaign contributions. The welfare analysis suggests that the presence of a pharmaceutical lobby distorting patent protection is socially undesirable in a closed-economy setting but may improve social welfare in a multi-country setting, which features an additional efficiency tradeoff between monopolistic distortion and international free-riding on innovations.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4349.

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Date of creation: Aug 2007
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Handle: RePEc:pra:mprapa:4349

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Related research
Keywords: campaign contributions; intellectual property rights; patent length; special interest politics;

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Find related papers by JEL classification:
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chu, Angus C., 2008. "A Politico-Economic Analysis of the European Union’s R&D Policy," MPRA Paper 10329, University Library of Munich, Germany. [Downloadable!]
  2. Chu, Angus C., 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," MPRA Paper 17342, University Library of Munich, Germany. [Downloadable!]
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