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Optimal Intellectual Property Rights Exhaustion and Humanitarian Assistance during a National Health Emergency

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  • Drusilla K. Brown
  • George Norman

Abstract

We analyze policy options during an international health emergency to provide consumers in least developed countries access to patented life-extending pharmaceuticals. We show that a properly specified tariff against re?xports achieves optimal price dispersion and is shown to depend on the nature of demand, product development costs and humanitarian concerns by western citizens for patients inside a health emergency zone. A tariff dominates regional exhaustion for achieving optimal price dispersion, improves the efficiency properties of a patent for covering product development cost and is a more efficient tool for internalizing a humanitarian externality than a targeted consumption subsidy.

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Bibliographic Info

Paper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0314.

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Date of creation: 2003
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Handle: RePEc:tuf:tuftec:0314

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Keywords: Intellectual Property Rights; AIDS; Developing Countries; WTO;

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  1. Richardson, Martin, 2002. "An elementary proposition concerning parallel imports," Journal of International Economics, Elsevier, vol. 56(1), pages 233-245, January.
  2. Patricia Danzon, 1997. "Price Discrimination for Pharmaceuticals: Welfare Effects in the US and the EU," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 4(3), pages 301-322.
  3. Deardorff, Alan V, 1992. "Welfare Effects of Global Patent Protection," Economica, London School of Economics and Political Science, vol. 59(233), pages 35-51, February.
  4. Varian, Hal R., 1989. "Price discrimination," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 10, pages 597-654 Elsevier.
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